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Portfolio > Alternative Investments > Commodities

New Commodity, Brazil Funds on Tap

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Russell Investments says it has introduced a new mutual fund that aims to deliver portfolio diversification and exposure to the long-term performance of global commodity markets.

The new fund, the Russell Commodity Strategies Fund (RCSAX) is a multi-manager mutual fund with a specific commodities mandate.

“In the continued search for better diversification and broader global opportunities, some investors are looking beyond traditional markets to commodities and real assets. While volatile on their own, when included as a small part of a well-diversified portfolio, a commodities strategy has the potential to lower a portfolio’s overall long-term volatility,” said James Ind, portfolio manager at Russell, in a statement.

Russell has added the new commodity fund to its asset-allocation strategies and has also made it available as a standalone fund for advisors who wish to provide clients with exposure to energy, industrial metals, livestock, precious metals, grains and softs.

“The inclusion of the Russell Commodity Strategies Fund is the latest statement of our belief that investment risk can be best managed by diversifying across asset classes, across investment styles and across investment managers,” explained Tim Noonan, managing director for capital markets insights for Russell’s private client services business, in a press release.

According to Russell, the new commodities strategy fund will invest in commodities-linked securities, derivative instruments, cash and fixed income securities that together are intended to provide clients with exposure to the performance of the collateralized commodity futures markets.

In addition, the fund will invest in a wholly-owned offshore subsidiary that will invest in commodity-linked swaps and other investments in which the fund cannot directly invest for tax reasons.

Meanwhile, Global X Funds launched the Global X Brazil Consumer ETF (BRAQ) on July 8. The company says this the first ETF to offer targeted access to the rapidly growing Brazilian consumer sector.

The Global X Brazil Consumer ETF tracks the Solactive Brazil Consumer Index, which — as of June 16, — had AmBev, JBS Natura Cosmeticos as its largest components.

“Brazil is the largest Latin American country by GDP, area, and population. Projections for private spending are favorable, thanks to the trends over the past half decade of rising real wages and disposable income, and falling unemployment,” said Bruno del Ama, CEO of Global X Funds, in a statement. “The Global X Brazil Consumer ETF provides efficient access to these trends.”

Global X says the Brazil Consumer ETF is part of a family of Brazil ETFs which includes the Global X Brazil Mid Cap ETF (BRAZ) introduced on June 22. Other members of the ETF family set to launch include those focusing on Brazilian financials, industrials, materials and utilities sectors.


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