Jefferies Asset Management has introduced what it believes is the first commodities exchange-traded fund tied to an equities rather than a futures index, and it is planning other equities-based commodities ETFs in the near future.
The Jefferies TR/J CRB Global Commodity Equity Index Fund tracks the Thomson Reuters/Jefferies In-The-Ground CRB Global Commodity Equity Index. The index is comprised of the stocks of companies around the world involved in agriculture, industrial metals, energy and precious metals.
Adam De Chiara, co-president of Jefferies Asset Management, commented, “Unlike many futures-based commodity ETFs, potential new futures regulation should not impact the ability of this ETF to issue shares. Additionally, there is no Schedule K-1 to file, and since the ETF is not based on futures, it avoids the cost and complexity of continually buying and selling expiring futures contracts.”
Further, Jefferies believe the fund will help raise capital for rapidly expanding global commodity production. “That should be good for consumer, good for producers and good for the global economy,” Chiara said.