Wed, 12/06/2019 - 10:39
IDX Insights, a research & development firm, has launched its first of a series of tactical Commodity ETN indices utilising the Barclays iPath Commodity ETNs.
The IDX Tactical Long/Flat Commodity Index is designed to provide diversified exposure across the seven iPath sector commodity ETNs with the ability to allocate 100 per cent to a "cash-substitute" ETF. The index uses IDX's proprietary "Composite Momentum" score to evaluate each sector ETN monthly to determine which sectors to include and at what weighting.
The IDX Strategic Commodity Beta Index utilises the collective momentum score from the sector commodity ETNs to determine the allocation between the iPath Pure Beta Broad Commodity ETN (BCM) and the iShares Core US Aggregate Bond ETF (AGG).
The IDX Commodity Momentum Index uses the composite momentum score to dynamically allocate among the seven sector commodity ETNs with 100 per cent long-only exposure at all times.
Ben McMillan, founding partner and CIO of IDX Insights says: "Commodities is an asset class where we've increasingly seen demand for exposures that can harvest the upside while protecting against large drawdowns in a systematic, rules-based way. We like the Barclays iPath ETNs because we believe they provide investors with best-in-class exposures to an asset class where other products are either too expensive or inefficient. Having these building blocks available to us makes these Indexes possible."
With the prospect of higher volatility, rising rates and increasing geo-political concerns, investors are seeking strategies that can provide meaningful upside in a way that is both risk-controlled and uncorrelated to equity markets. The IDX Commodity indices seek to provide that outcome.
IDX indices are currently available on the SMArtX platform.