A fund that we have profiled in the past saw an uptick in trading volume last Friday, as the fund itself is trading near its lowest levels since last summer.
GCC (GreenHaven Continuous Commodity, Expense Ratio 0.85%) is an equal weighted index strategy which invests in seventeen different commodities across the spectrum of grains, livestock, energy, metals, as well as exposure to soft commodities such as coffee, cocoa, sugar, and cotton.
GCC generally averages about 106,000 shares on a daily basis, and on Friday more than five times that volume traded. [Commodity ETF Reshuffles]
The fund has a rather unique make-up in that it re-balances the fund on a daily basis in order to maintain true “equal weighting” of the seventeen commodities across the portfolio.
The investment theme of GCC generally resounds with critics of diversified commodity products that tend to be more heavily weighted to energy, namely DBC (PowerShares DB Commodity, Expense Ratio 0.93%) and DJP (iPath DJ-UBS Commodity Index ETN, Expense Ratio 0.75%).
However, in the trailing one year period as one might expect, GCC is bringing up the rear in terms of performance compared to both DBC and DJP because the “energy over-weight” over time has actually helped generate better shorter term returns (as Ag and metals prices have largely been pummeled recently). [A Look at the Equal-Weight Commodity ETF]
Since inception (Feb 2008) however, GCC has demonstrated very favorable comparative returns versus both DBC and DJP (in excess of 600 bps and 2000 bps of outperformance to DBC and DJP respectively) and thus the fund has a live five year performance number under its belt now as well, which unquestionably will help it attract institutional attention and assets.
GreenHaven Continuous Commodity
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.