Daily ETF Watch: New Commodity Fund Filed

Elkhorn plans commodity rotation ETF.

Reviewed by: Heather Bell
Edited by: Heather Bell

Elkhorn Investments has made its third commodity ETF filing. The Elkhorn Dorsey Wright Commodity Rotation Portfolio is actively managed, but it will use Dorsey Wright’s relative strength evaluation methodology to select the five commodities with the greatest relative strength out of a universe of 24 commodities.

The fund will hold commodity futures through a Cayman Islands-based subsidiary. While 25% of the ETF’s portfolio will be invested in the subsidiary, the remainder of the portfolio will hold cash equivalents, money market funds and investment-grade, short-term debt, as well as other similar investments.

Elkhorn has already filed for two similar actively managed ETFs that will invest in commodity futures via a subsidiary based in the Cayman Islands. The Elkhorn S&P GSCI Dynamic Roll Commodity ETF and the Elkhorn RAFI Commodity ETF were both put into registration in November 2015.

Other firms have been moving away from commodity pools and looking more at structuring their commodity funds as 1940 Act funds with subsidiaries located in the Cayman Islands. In particular, ProShares just launched a fund using a similar structure yesterday. The ProShares Managed Futures Strategy ETF (FUT) is really a replacement for the ProShares Managed Futures Strategy (FUTS | D), which is structured as a commodities pool and will cease trading in March.

The filing indicates that the Elkhorn ETF will list on the Nasdaq exchange, but it did not include a ticker or expense ratio.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.