WisdomTree Updates ETF Family with Enhanced Commodity Strategy Fund (GCC)
December 22 2020 - 8:30AM
WisdomTree (NASDAQ: WETF), an exchange-traded fund (“ETF”) and
exchange-traded product (“ETP”) sponsor and asset manager, today
announced the completion of the reorganization of the WisdomTree
Continuous Commodity Index Fund (“CCIF”) into and with the
WisdomTree Enhanced Commodity Strategy Fund. The
Enhanced Commodity Strategy Fund is organized under the Investment
Company Act of 1940, as amended, with no Schedule K-1 and an
expense ratio of 0.55%. The Enhanced Commodity Strategy Fund will
focus on providing broad-based exposure to a diversified basket of
commodities through investment in futures contracts and trade under
the ticker symbol “GCC”.
Jeremy Schwartz, WisdomTree Global Head of Research, said, “The
macroeconomic backdrop as we emerge from lockdowns could bring
higher inflation. We believe it is a good time to investigate
commodities as hedges to traditional portfolios given the sustained
low interest rate environment and these elevated inflation
risks.”
Enhanced Commodity Strategy Fund: What’s Under the
Hood?
Taking a broad-based commodity investing approach, the Enhanced
Commodity Strategy Fund seeks to:
- Provide broad-based exposure to a
diversified basket of over 25 commodities across four major
sectors: Energy, Agriculture (including Grains, Softs and
Livestock), Precious Metals, and Industrial Metals, in contrast to
CCIF, which provided exposure to a more limited basket of 17
commodities; and
- Focus on hard assets and precious metals to preserve purchasing
power and industrial metals like copper, aluminum, and nickel for
anticipated demand growth with the energy transition and
decarbonization processes.
“The Enhanced Commodity Strategy Fund provides commodity
exposure across all major sectors while recognizing through its
exposures the shifting commodity demand from new technologies in
electronic devices, electricity delivery and storage,
transportation, communication, and manufacturing. In contrast to
CCIF, the Enhanced Commodity Strategy Fund does not use a fixed
rolling mechanism as it seeks to maximize carry and roll futures
contracts in a manner designed to enhance returns while lowering
volatility,” Schwartz added.
New Dynamic Maturity Selection
High roll costs can arise when a commodity strategy invests in a
single point on the futures curve. When a futures curve is in
contango (upward sloping prices over time), rolling positions in
the front month, where the curve is usually steeper, could
significantly erode returns if spot prices don’t rise dramatically.
The Enhanced Commodity Strategy Fund’s roll strategy seeks to boost
returns by dynamically selecting maturities in an effort to
maximize carry, enhance return and reduce volatility compared to
the more standard, front-month commodity strategies.
The Enhanced Commodity Strategy Fund is a long-only fund
investing in commodities primarily through futures contracts.
Target weights for each sector are generally determined annually in
December driven by WisdomTree’s views on factors such as
macro-economic outlook, single commodity outlooks, liquidity and
economic significance. Positions are reviewed monthly based on the
shapes of futures curves, by rolling applicable futures contracts
into the maturity with the highest expected carry for each contract
in the portfolio. During this process, tactical sector tilts that
are deemed important based on sector may be implemented.
Learn more about the WisdomTree Enhanced Commodity Strategy Fund
(GCC) here.
This Fund is new and has limited operating history. Past
performance is not indicative of future results.
Investors should carefully consider the investment
objectives, risks, charges and expenses of the Funds before
investing. To obtain a prospectus for WisdomTree Funds containing
this and other important information, please call 866.909.9473 or
visit WisdomTree.com to view or download a prospectus. Investors
should read the prospectus carefully before investing.
Commodities and futures are generally volatile and are not
suitable for all investors. Investments in commodities may be
affected by overall market movements, changes in interest rates and
other factors such as weather, disease, embargoes and international
economic and political developments.
There are risks associated with investing, including the
possible loss of principal. An investment in this Fund is
speculative, involves a substantial degree of risk, and should not
constitute an investor’s entire portfolio. One of the risks
associated with the Fund is the complexity of the different factors
which contribute to the Fund’s performance. These factors include
use of commodity futures contracts. Derivatives can be volatile and
may be less liquid than other securities and more sensitive to the
effects of varied economic conditions. The value of the shares of
the Fund relate directly to the value of the futures contracts and
other assets held by the Fund and any fluctuation in the value of
these assets could adversely affect an investment in the Fund’s
shares. Please see the Fund’s prospectus for a discussion of
risks.
Because of the frequency with which the Fund expects to roll
futures contracts, the impact of such contango or backwardation may
be greater than the impact would be if the Fund experienced less
portfolio turnover. Backwardation: a market condition in which a
futures price is lower in the distant delivery months than in the
near delivery months. As a result, the fund may benefit because it
would be selling more expensive contracts and buying less expensive
ones on an ongoing basis; and Contango: A condition in which
distant delivery prices for futures exceeds spot prices, often due
to costs of storing and inuring the underlying commodity. Opposite
of backwardation. As a result, the Fund’s total return may be lower
than might otherwise be the case because it would be selling less
expensive contracts and buying more expensive one.
WisdomTree Funds are distributed by Foreside Fund Services, LLC,
in the U.S. only.Jeremy Schwartz is a registered representative of
Foreside Fund Services, LLC.
About WisdomTreeWisdomTree Investments, Inc.,
through its subsidiaries in the U.S. and Europe (collectively,
“WisdomTree”), is an exchange-traded fund (“ETF”) and
exchange-traded product (“ETP”) sponsor and asset manager
headquartered in New York. WisdomTree offers products covering
equities, fixed income, currencies, commodities and alternative
strategies. WisdomTree currently has approximately $67.0 billion in
assets under management globally. For more information, please
visit www.wisdomtree.com or follow us on Twitter
@WisdomTreeETFs.
WisdomTree® is the marketing name for WisdomTree Investments,
Inc. and its subsidiaries worldwide.
WTPR-20201217-0098
Contact Information:Media RelationsWisdomTree
Investments, Inc.Jessica
Zaloom+1.917.267.3735Jzaloom@wisdomtree.com /
wisdomtree@fullyvested.com
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