“Investment firm Jefferies just released the Thomson-Reuters Jefferies Commodity Equity Index Fund (CRBQ), an exchange traded fund that, curiously, doesn’t own commodities or commodities futures. The ETF owns shares of companies that produce commodities, such as miners and oil firms. The fund avoids the hassles of both futures position limits, which have been a concern for the United States Natural Gas Fund (UNG), and the physical ownership of metals. The fund determines the weighting of its constituent stocks by the value of resources produced, not market value. Energy comprises 39% of the fund, agriculture 38%, base metals 14% and precious metals 8.7%,” Roger Nusbaum Reports From The Street.

….”The other quibble is the marketing effort that focuses on how the fund avoids the hassles of owning the actual commodities or proxies for the commodities. Clearly, any equity fund does this because equities aren’t commodities. That pitch would make more sense if the Thomson-Reuters Jefferies Commodity Equity Index Fund were the first resources-oriented fund, but it’s not — not even close. Just about every big ETF provider has one or two funds in the space,” Nusbaum Reports.
 

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“That being said, the fund offers promise as a proxy for materials and energy in a diversified portfolio. Both sectors are an easy place to add foreign exposure without a lot of Western Europe, which has a high correlation to the U.S., or Japan, which is light in resources stocks,” Nusbaum Writes.

Full Story: HERE

 

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