United States Commodity Funds LLC, manager of $3.4 billion in exchange-traded securities, got approval from the U.S. Securities & Exchange Commission to start a fund that will bet on Asia’s demand for raw materials.
The United States Asian Commodities Basket Fund will be listed on NYSE Arca Inc. and own futures in those commodities where China, Japan and India combined account for at least 10 percent of global demand and are likely be net importers, the SEC said in a notice on its website.
Oil will have the biggest weight in the fund, at 22 percent, according to the filing. China, Japan and India account for 19 percent of global oil demand and 5.9 percent of production, it said. Corn, soybeans, wheat and copper will each account for 10 percent.
Commodity assets under management were $429 billion in October, with exchange-traded products accounting for $213 billion, Barclays Plc said in a Nov. 30 report. ETPs backed by precious metals had $172 billion in assets, while those tracking broad-based indexes had $29 billion, the bank said.
The Standard & Poor’s GSCI Index of 24 commodities is down 0.2 percent this year, heading for the first drop since 2008.
Brent crude oil will have a 20 percent weighting in the fund, according to the filing. Brent oil on the London-based ICE Futures Europe exchange has gained 2.6 percent this year to $110.16 a barrel. Oil on the Dubai Mercantile Exchange will also be used, it said.
Corn, soybeans and wheat futures traded on the Chicago Board of Trade will each account 10 percent of the fund, according to the notice. Wheat is up 18 percent this year, soybeans gained 17 percent and corn advanced 7.1 percent.
Copper traded on the Comex in New York will have 10 percent weighting, while gold and silver futures will account for 5 percent each. Copper has gained 5.3 percent this year, while gold is up 6.4 percent.
The fund will also invest in the London Metal Exchange zinc and nickel contracts, raw sugar traded on ICE Futures U.S., platinum traded on Tokyo Commodity Exchange as well as canola oil, palm oil, gasoil and rubber.
NYSE Arca is the electronic platform of NYSE Euronext.