The rapid development of the ETF industry has cracked the world of commodity investing wide open, allowing average investors to gain cheap and easy access to a previously hard-to-reach asset class. And while some choose to focus on a single commodity, many investors also look for more diversified exposure, or perhaps even an equity spin on the space. As the ETF industry continues to expand, investors are now able to pick and choose from hundreds of products [for more commodity ETF news and analysis subscribe to our free newsletter].
Six months ago, issuers US Commodity Funds, Exchange Traded Concepts and BNP Paribas rolled out yet another three intriguing commodity exchange-traded products; a diversified metals portfolio United States Metals Index Fund ETV (NYSEARCA:USMI), an oil sands ETF Exchange Traded Concepts Trust (NYSEARCA:SNDS) and a global commodities fund Stream Exchange Traded Trust (NYSEARCA:BNPC). Though it is still too early to tell whether or not these funds will be successful, together these three funds have accumulated over $20 million in assets under management. Below we take a look at how these three funds have fared over the last six months:
United States Metals Index Fund ETV (NYSEARCA:USMI)
This offering from US Commodity Funds is designed to reflect the performance of a diversified group of 10 metals futures contracts: aluminum, copper, nickel, zinc, lead, tin, platinum, silver, palladium and last but certainly not least, gold. What distinguishes United States Metals Index Fund ETV (NYSEARCA:USMI) from other funds is that its underlying index attempts to maximize backwardation and minimize contango while still using contracts in the liquid portions of the futures curve [see also Inside Citi’s 2013 Precious Metals Outlook].
But considering the other broad-based metals ETFs, namely PowerShares’ ultra-popular Powershares DB Base Metals Fund (NYSEARCA:DBB), it seems as thought United States Metals Index Fund ETV (NYSEARCA:USMI) might be in for some steep competition. Currently, the fund has only accumulated $2.7 million in total assets and trades less than 2,000 times a day on average. Since inception in June of this year, USMI has lost a little over 1%, while in the same timeframe, DBB has gained more than 6%. Obviously only time will tell if this fund can prove its worth, though considering its issuer is the creator of United States Natural Gas Fund, LP (NYSEARCA:UNG), it may still be able to pick up steam.