Our head of funds research offers a view on the latest addition to the ii Super 60.
The Super 60 fund: Fund spotlight: WisdomTree Enhanced Commodity ETF
Listen or read about the fund, it’s your choice.
We have added WisdomTree Enhanced Commodity ETF (LSE:WCOB) to the interactive investor Super 60 list as a Specialist Low-Cost option. It offers investors a broad and diversified commodity exposure, covering major commodity sectors such as industrial metals, precious metals, energy and agriculture.
This ETF combines both passive and active investing. It aims to track the performance of the so-called rule-based index, the Optimised Roll Commodity, while looking to outperform the widely followed passive Bloomberg Commodity Index over the long term.
The fund is well positioned to benefit from the current market climate and potentially deliver higher real returns. Its effective cost management and lower risk profile gives the strategy a competitive advantage against other funds in the sector.
- Niche commodity ETFs start year with double-digit gains
- WisdomTree Enhanced Commodity ETF added to ii Super 60
What does it invest in?
This ETF offers a very well-diversified exposure to a basket of commodities. Its holdings tend to show lower correlation between each other, which is very important. At sector level, the largest allocation is to agriculture, which is around 37%. The largest individual position is in gold (over 12%). Gold is traditionally viewed as a hedge in inflationary environment.
|Fund/Index/Morningstar Category||08/05/2020 - 07/05/2021||08/05/2019 - 07/05/2020||08/05/2018 - 07/05/2019||08/05/2017 - 07/05/2018||08/05/2016 - 07/05/2017|
|WisdomTree Enhanced Commodity ETF||28.76||-8.04||-6.48||6.35||12.53|
|Bloomberg Commodity Index||33.00||-15.28||-6.51||5.12||10.90|
|EAA Fund Commodities - Broad Basket||36.36||-16.81||-8.25||9.61||7.50|
Source: Morningstar. Total Return GBP.
Why should investors consider commodities?
Commodities are considered a good source of portfolio diversification. Commodities show low correlations with equities and bonds. In addition, the asset class has historically performed in line with the movement of inflation and, as such, is typically viewed as a good hedge against inflation, which has recently become more of a concern among investors.
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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.