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BlackRock Unveils 5 Commodity Sector ETFs
February 7, 2012
BlackRock, manager of the iShares ETFs, launched five new stock ETFs that are closely linked to key commodity sectors.
The new funds track MSCI indexes and include both international and U.S. stocks involved in agricultural production, energy, and mining.
The funds are:
- iShares MSCI Global Agriculture Producers Fund (NYSEArca: VEGI)
- iShares MSCI Global Energy Producers Fund (NYSEArca: FILL)
- iShares MSCI Global Select Metals & Mining Producers Fund (NYSEArca: PICK)
- iShares MSCI Global Gold Miners Fund (NYSEArca: RING)
- iShares MSCI Global Silver Miners Fund (NYSEArca: SLVP)
"Commodities are a key allocation in many portfolios, often used as portfolio diversifiers or a hedge against inflation," said Darek Wojnar, Head of US iShares Product Development and Management at BlackRock. "Commodity producer ETFs are a unique way for investors to access equity-based exposure to this asset class, wrapped with the diversification benefits of an ETF."
The iShares commodity producing ETFs include only companies at, or near, the initial production cycle of the commodity.
For instance, the Global Agriculture Producers Fund targets the front end of the production chain (fertilizers or agricultural materials) while excluding exposure from companies at the end of the production chain (packaging and marketing). Companies at the beginning of the production cycle are more sensitive to fluctuations in the underlying commodity price, whereas companies further down the production cycle are impacted by a number of factors in addition to commodity prices.
Over the past year, global commodity prices (NYSEArca: GCC) have declined around 9%. Certain sectors, like precious metals (NYSEArca: GLTR) have produced healthy gains, while others, like natural gas (NYSEArca: UNG) and energy (NYSEArca: JJE) have lagged.
Basic materials stocks (NYSEArca: XLB) within the S&P 500 lost 10.92% last year, but have performed strongly this year, already gaining over 12%.
The annual expense ratios for the new iShares commodity sector ETFs are 0.39%.
At the end of January 2012, BlackRock managed $432.95 billion in 232 exchange-traded products. |
