This is an actively managed commodity ETF that uses the Bloomberg Commodity Index as its benchmark but does not replicate it, aiming instead for excess returns. It builds commodity exposure through derivatives such as commodity-linked notes, total return swaps, options and futures.

It suits investors who want to add commodity exposure to a portfolio centered on stocks and bonds in order to gain diversification benefits.

It is an ETF run with an active management approach by Mast.

The fund builds its underlying exposure with commodity-linked derivatives, and its proprietary quantitative model decides how much to allocate to each product. Collateral-type assets not used for derivatives are allocated to bonds without maturity or credit rating restrictions, adding interest income.

• Active commodity management that seeks excess returns rather than replicating an index
• A structure that combines commodity exposure with bond collateral management
• A design with few holdings, so allocation decisions flow directly into performance

Assets under management (AUM) stand at $30.8M, and the total expense ratio is 0.69% per year.

Commodity ETFs build exposure through futures rather than physical holdings, so costs or gains arise when contracts are rolled over at expiry. This is why performance differs from product to product even when they hold the same commodities.

Commodity prices often change direction depending on the economic cycle, the direction of the dollar and supply disruptions. Because this ETF does not follow its benchmark index exactly, performance gaps widen in periods when the model's judgment is right and in periods when it is wrong.

When inflationary pressure builds, money flows into commodity assets, and when prices stabilize, interest fades. This pattern repeats. As a new product, its asset base is still small, and whether inflows grow will depend on how its track record develops.

Commodity diversification and active allocation are its strengths, while a short track record and the complexity of its derivatives structure are drawbacks.

Investors seeking broad commodity exposure can compare products such as DJP, which tracks the Bloomberg commodity index directly, DBC, which invests in broad commodity futures, and PDBC, which also earns income from collateral bonds. To focus on a single commodity, GLD for gold and USO for energy are also options. Unlike these, this ETF lets model judgment change its allocations, so performance dispersion is larger.

These are items to review before investing in this ETF. Commodity products differ from equity ETFs in their holding structure, costs and tax treatment, so advance checks are necessary. The cost burden unique to active management should be considered as well.

Commodity prices are highly volatile in themselves, and if the model's judgment diverges from the benchmark index, the performance gap widens. Credit issues at derivatives counterparties and the short track record should also be taken into account.

It is an option worth considering for investors who want to add commodities as a supplementary portfolio asset. If you find the costs and structure hard to accept, it is advisable to look first at index-tracking commodity products.