“New kind of benchmark” for ETF commodities

ETF_tradingLegal & General Investment Management (LGIM) and Source have launched a commodity exchange-traded fund (ETF) based on a new index designed to provide diversified exposure to the asset class.

The Ucits-compliant fund uses the LGIM Commodity Composite Index to gain “high quality, diversified exposure to commodities”. The index aims to be a new kind of benchmark for broad-based commodity exposure by offering exposure to a selection of ‘best of breed’ commodity indices.

Graeme Dewar, head of strategy implementation at LGIM, said “We are seeing increasing demand from pension clients looking for access to this asset class.  Their primary requirements are for an efficient, dynamic product with diversification of counterparty risk.  Our solution has been to develop an innovative type of benchmark index that includes a minimum of three constituent sub-indices.”

The ETF is listed on the London Stock Exchange and trades in sterling and dollars. It is registered for sale in Austria, Finland, France, Germany, Ireland, Italy (for institutional investors only), Luxembourg, the Netherlands, Sweden and the UK.

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