Global X launches All-in-One commodities ETF on ASX

Global X launches All-in-One commodities ETF on ASX

Global X ETFs (Global X) has launched the Global X Bloomberg Commodity ETF (Synthetic) (ASX: BCOM) on the Australian Securities Exchange, enabling Australians to gain exposure to a well-diversified basket of commodities which are significant to the world economy and have low correlation with share and bond prices.

The ETF tracks the Bloomberg Commodity Index 3-Month Forward Excess Return and offers investors liquid exposure to a broad-based basket of soft and hard commodities, including energy, grains, precious metals, metals, and livestock.

“Commodities have historically exhibited low correlations with most assets Australians consider, such as property, shares and bonds. Investment in this asset class enhances the opportunity for investors to gain attractive risk-adjusted returns,” said Blair Hannon, Head of Investment Strategy with Global X.

“BCOM offers exposure to commodities which are some of the most significant to the global economy. They tend to have the largest and most liquid futures markets, making them easiest for investors to access.

“Importantly, commodities function as a natural hedge against inflation; their prices tend to rise when inflation is rising. For this reason, commodities can add protective benefits to a portfolio as inflation continues to prove persistent,” Hannon said.

Commodities cover a broad range of raw materials that form the global economy’s basis. Generally, commodities fall into six categories: energy such as oil, gas, and diesel; precious metals such as gold, silver and platinum; industrial metals including copper and aluminium; livestock such as cattle; grains including wheat and soya beans; and soft commodities such as coffee, cotton and sugar.

“BCOM packages all these subcategories into one fund while capturing the performance of the entire commodities asset class for investors. Doing so can help reduce both market and idiosyncratic risks of individual commodities and avoids investors having to try to pick winners in a crowded field,” Hannon said.

“We are proud to work with Global X for their launch of the first broad-based commodity ETF in Australia,” said Ji Zhuang, APAC Head of Indices at Bloomberg. “With the current global uncertainty, investors are attracted to products with more diversified exposures to hedge long-term macroeconomic risks. Our established BCOM index is uniquely designed to focus on market liquidity and diversification with capping mechanisms to preserve balance over time. In addition, the BCOM Forward indices offers investors a comprehensive set of exposures along the commodity curve, allowing ETF providers like Global X to customise their offering.”

BCOM represents the 33rd ETF from Global X on the ASX and adds to the company’s suite of investor choices across a range of diverse asset classes. “With the launch of Global X’s commodities ETF, BCOM, Australian investors can gain exposure to these crucial drivers of the global economy,” Hannon said.