abrdn Unveils Industrial Metals ETFs on NYSE Arca | ETF strategy

abrdn, previously Aberdeen Standard Investments, expanded its range of commodity ETFs with a new fund providing low-cost access to a basket of industrial metals.

abrdn introduces Industrial Metals ETFs on NYSE Arca

This fund is the cheapest ETF in the US, providing diversified access to industrial metals.

V abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF (BCIM US) was listed NYSE Arca with an expense ratio of just 0.39%.

Steve Dunn, head of ETFs at abrdn, said: “The world is in the early stages of a huge energy transition from fossil fuels to more sustainable sources. Nearly every renewable energy system uses a large amount of industrial metals, including electric vehicles, wind turbines, solar panels, grid-connected batteries, and carbon capture systems.

“This huge, long-term structural demand will drive significant new demand for industrial metals, and this trend is opening up this trend for investors.”

Methodology

The Foundation monitors Bloomberg Industrial Metals subindex which consists of copper, aluminum, zinc and nickel commodity futures contracts. Underlying futures contracts have maturities ranging from one to three months and follow a fixed scrolling schedule throughout the year.

Bloomberg’s methodology aims to present commodities according to their average liquidity, which accounts for two-thirds of the weighting formula, and their value to the global economy, based on approximately five-year production data weighted in US dollars.

The current weights of the four industrial metals in the index are copper (35.1%), aluminum (30.4%), zinc (18.4%) and nickel (16.1%).

The fund also earns income from high quality short-term fixed income securities that are bought and used as collateral for the fund’s futures positions.

The fund is organized under the Investment Companies Act 1940 without Appendix K-1, which means that investors will instead have to deal with the less cumbersome 1099 tax form.

Its price means that it is the cheapest ETF in the United States, providing diversified access to industrial metals, with its only competitor being $ 430 million. Invesco DB Base Metals Fund (DBB US) by 0.84%. DBB tracks DBIQ Industrial Metals Optimal Profitability Index which provides access to futures contracts for aluminum, zinc and copper. The underlying contracts are rolled up using an optimization process that seeks to use the shape of the curves of commodity futures.

abrdn offers seven more commodity ETFs, still referred to as the “Aberdeen Standard,” which collectively contain $ 6.9 billion in assets. These funds include two commodity ETFs as well as five precious metals ETFs providing access to gold, silver, platinum, palladium and a basket of precious metals.

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