New Listing

China Post Global relists two commodity ETFs on LSE

George Geddes

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China Post Global has relisted two commodity ETFs on the London Stock exchange, offering exposure to a basket of commodities and gold mining.

The Market Access Rogers International Commodity Index UCITS ETF (RICI) has a total expense ratio (TER) of 0.6% and the Market Access NYSE Arca Gold BUGS Index UCITS ETF (GOLB) has a TER of 0.65%.

Both products are also listed on the Deutsche Boerse and the Six Swiss Exchange and have been since their inceptions in 2006 and 2007, respectively.

They were initially listed on the London Stock Exchange but were delisted in 2016 when China Post Global acquired the Market Access Range from the Royal Bank of Scotland as the firm didn't have strong UK coverage.

Danny Dolan, managing director of China Post Global, told ETF Stream: "We delisted in 2016 because we did not have any significant UK sales coverage at that time so we decided to focus on continental Europe where our distribution capability was much stronger at that time.

"China Post Global now has much stronger sales coverage in the UK, and this combined with the strongly increased investor interest in gold and commodities makes it the right time to re-list both ETFs in London."

RICI represents the value of a basket of commodities consumed in the global economy, ranging from agricultural to energy to metal products. It is comprised of 38 different exchange-traded commodities.

The energy sector is RICI's largest exposure with the top three exposures consisting of crude oil with 10.54%, Brent crude with 9.98% and natural gas with 6.62%. Gold is the next largest exposure with 5.9%.

GOLB tracks the NYSE Arca Gold BUGS index, an equally weighted index of companies involved in gold mining.

It provides exposure to the movement of gold prices by including companies listed on the New York Stock Exchange that do not hedge their gold production beyond 18 months.

While GOLB is tracking an equally weighted index, its holdings are dominated by Newmont Corp and Barrick Gold Corp which represent 19.6% and 18.6%, respectively. The next largest exposure is Agnico Eagle Mines with 8.1% weighting.

Dolan added: “Interest in gold and commodities has increased sharply since the coronavirus pandemic began.

“Investors are seeking a safe haven in gold, and an inflation hedge in broad commodity indices after huge quantitative easing measures that have been introduced globally.”

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