This is a commodity strategy ETF that tracks the Auspice Broad Commodity Index. It uses a trend-following approach, holding 12 commodity futures across energy, metals, and agriculture or moving to cash according to quantitative rules.

It suits diversified investors who want commodity exposure while also seeking trend-based downside risk management.

It is an actively managed ETF run by Direxion.

For each of the 12 commodity futures, the fund uses a long-or-cash approach: it buys when the trend is up and moves that position's weight to cash when a downtrend signal appears. At month end, it adjusts weights if volatility exceeds the threshold, and it applies a smart roll method that selects cost-efficient contract maturities.

• Risk management through a move to cash during downtrends
• Cost-efficient smart roll applied

Assets under management (AUM) stand at $201.2M, and the expense ratio is 0.72% per year.

Unlike ETFs that simply hold a commodity index as is, it can raise its cash weighting based on trend signals, aiming to provide protection in downturns.

Performance depends on the commodity price cycle and the strength of trends. It can capture direction well when trends are clear, but frequent signal reversals can weigh on results in sideways markets.

Investor interest tends to rise when demand for inflation hedges or expectations of a commodity rally come to the fore, and the fund is often used as a satellite asset for diversification.

Trend-based downside protection is its core strength, while signal costs in sideways markets and the inherent volatility of commodities are the main drawbacks.

For the same broad commodity exposure through a simple index-tracking approach, PDBC is an alternative, and BCI is another broad commodity ETF with a relatively low fee worth considering. If you want more active management, FTGC is also an option in the same commodity category. What sets COM apart from these is that it adjusts its cash weighting according to trend signals.

Here are the points to review before investing in COM. As a commodity satellite asset, it is important to fully understand the trend-following strategy, its costs, and the high inherent volatility of commodities in advance, and to set an appropriate allocation.

In sideways periods with unclear trends, frequent signal reversals can hurt performance, and sharp commodity price moves can cause large short-term losses. The non-diversified structure should also be taken into account.

It is worth considering as a satellite asset for investors who want to add trend-based downside protection to their commodity exposure. If you simply want to hold a commodity index, PDBC or BCI fits better, and if you need trend management, COM is the better match.