ETF News & Commentary
SAN DIEGO (ETFguide.com) - The U.S. Commodity Futures Trading Commission (CFTC) has been waging war against commodity index funds and visible evidence they are winning that war has already begun to manifest itself.
In response to the CFTC’s contention that commodity index funds are distorting the price of commodity futures, Deutsche Bank has expanded the number of commodities tracked by two of its commodity ETFs.
The changes impact the PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) and the PowerShares DB Agriculture Fund (NYSEArca: DBA). Both funds now contain additional commodities among their respective holdings to comply with position limits mandated by the CFTC.
The changes are summarized as follows:
In addition to the six commodities it currently tracks, DBC will add Brent Crude, Copper Grade A, Natural Gas, RBOB Gasoline, Silver, Soybeans, Sugar, and Zinc.
In addition to the four commodities it currently tracks, DBA will add Cocoa, Coffee, Cotton, Feeder Cattle, Kansas Wheat, Lean Hogs, and Live Cattle.
Other embattled commodity ETFs and ETNs have made dramatic changes.
In September, Deutsche Bank redeemed all outstanding shares for the PowerShares DB Crude Oil Double Long Exchange Traded Note and Barclays Global Investors suspended share issuance for its $1.7 billion iShares S&P GSCI Commodity-Indexed Trust (NYSEArca: GSG.)
Other single commodity ETFs with large positions in commodity futures have curtailed share issuance or are in the process of evaluating commodity exposure alternatives.
--Changes to Private Equity ETF
In other news, the PowerShares Listed Private Equity Portfolio (NYSEArca: PSP) now follows the Global Listed Private Equity Index. Additionally, the fund has been renamed the PowerShares Global Listed Private Equity Portfolio. PSP had previously tracked the Red Rocks Capital Listed Private Equity Index.
“Private equity is an essential asset class as both emerging and developed economies require capital for growth, re-capitalization and innovative technologies,” said Mark Sunderhuse, founder and managing director at Red Rocks Capital LLC. “The Global Listed Private Equity Index represents private equity investments on a global scale with exposure to more than 1,000 privately held businesses diversified by industry, geography, stage of investment, vintage year and capital structure.”
Index holdings are selected and rebalanced quarterly per modified market capitalization weights.
The fund’s ticker symbol and expense ratio remain the same.
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