Industry Updates

Solactive swaps index constituents on Invesco commodity composite ETF

Credit Suisse index comes in for Morgan Stanley’s total return index

Theo Andrew

Commodities table

Solactive has rotated the constituents in its Solactive Commodity Composite index tracked by the $145m Invesco Commodity Composite UCITS ETF (LGCU).

Following the changes, the Morgan Stanley MSCY Radar F3 Roll TR index will be replaced by the Credit Suisse Custom 66-01E Total Return index, a long-only index that takes the components and the methodology of the Bloomberg Commodity Index Excess Return.

It means the total number of indices tracked by Solactive’s composite benchmark remains at four, comprised of the Citi CUBES Total Return index, the Morgan Stanley MSCY RADAR Roll D TR index, the Deutsche Bank DBLCI-OY Balanced Total Return USD index alongside the new Credit Suisse index.

According to Invesco, the new index will re-define the hedge-roll period, rolling on the fifth index business day of each month, with the last roll date the fourth index business day of the month.

Furthermore, the index rolls at an actual roll percentage of 10%.

The Solactive Commodity Composite index aims to offer high-quality, diversified and tradable exposure to the global commodity market, comprising a minimum of three constituent indices.

The changes will take place on the next rebalancing date of 16 June, Invesco said.

The Morgan Stanley MSCY Radar F3 Roll TR index was first introduced to the Solactive Commodity Composite index in May 2021.

Since then, the index has been completely revamped, going from 10 constituents to four.

LGCU has ridden the huge wave of returns felt by commodity ETFs over the past couple of years, returning 85.6% over the past three years. The ETF is 40.8% up year to date.

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