Both funds are clearly still not recognized by everyone, as evident by the lower average daily trading volumes of about 2,900 and 500 shares in COMB and COMG respectively. This is however very common for newer ETFs breaking into an already established space such as this one (Futures-Based Commodities).
One thing that stands out to us is the extremely low expense ratios relative to the space and competing ETPs, that COMB and COMG offer. For example, the $1.1 billion GSG (iShares S&P GSCI Commodity-Indexed Trust, Expense Ratio 0.75%) and the $713 million DJP (iPath Bloomberg Commodity Index Total Return ETN, Expense Ratio 0.75%) both have significant assets but clearly cost much more than the newer COMB and COMG which offer similar exposures.
Fund literature from GraniteShares boasts “COMB is the lowest cost broad commodity ETF in the U.S.” and points out, as in the title of both of these funds, that the product does not issue a K-1, which is likely desirable for most investors and portfolio managers whom may have previously eschewed commodity futures based funds for this reason alone.
This said, COMB and COMG certainly have a strong case when presented to current investors of GSG, DJP (which is an ETN) or other broad products in the space in terms of delivering significant savings in terms of management expenses.
Back to strategy, when we look at the commodity exposures presently in COMB we see the following: 1) Agriculture (35.08%), 2) Energy (27.30%), 3) Industrial Metals (18.70%), 4) Precious Metals (12.04%), and 5) Livestock (6.89%).
COMG looks quite different, and of course tracks a different underlying index so we would expect as much. The specific exposures there are as follows: 1) Energy (57.03%), 2) Agriculture (18.66%), 3) Industrial Metals (11.09%), 4) Livestock (8.56%), and 5) Precious Metals (4.66%).
The GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (NYSE:COMB) was trading at $24.71 per share on Friday morning, down $0.14 (-0.56%). Year-to-date, COMB has declined -1.08%, versus a 11.75% rise in the benchmark S&P 500 index during the same period.
COMB currently has an ETF Daily News SMART Grade of NR (Not Rated), and is unranked among 130 ETFs in the Commodity ETFs category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
About the Author: Paul Weisbruch
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.