The bad boys of leveraged ETFs are back with a new toy. This time an ETF investing across 12 different commodities using a quantitative approach to asset picking. The Direxion Auspice Broad Commodity Strategy ETF (Unfortunately, we could not get stock quote COM this time.) was launched yesterday. The fund tracks (and tries to beat) the Auspice Broad Commodity Index.
Direxion first hinted to us about a new ETF during a webinar on commodities investing on March 8th.
“Investors recognize the value of diversification and inflation protection provided by commodities within a portfolio,” said Tim Pickering, Founder and CIO at Auspice Capital Advisors, the firm behind the index.
“We can seek to maximize these benefits with a tactical strategy that rides the strongest trends for upside potential, then allows for an exit to limit downside risk and volatility while providing for the best risk-adjusted results.”
Pickering was a vice president of trading at Shell. He began his finance career at TD Securities in Toronto and ended his career there as fund manager for the Energy Derivatives portfolio.
The new Direxion ETF can be long or flat. It has the ability to make position changes intra-month based on trends. There’s a monthly rebalance based on risk reduction where the allocation of individual components is reduced if volatility exceeds certain predetermined risk levels, Direxion said.
Net fees are 0.7%.