FX.co ★ New commodity ETF against inflation

WisdomTree launches a new European commodity ETF for investors to hedge against inflation.

European investors have been given a new way to hedge against rising inflation risk as WisdomTree launches a new large-scale exchange-traded ETF.

On Monday, a British investment company announced that its WisdomTree Broad Commodities UCITS (COM) fund has started trading on the London Stock Exchange. The company said PCOM will track the performance of the Bloomberg Commodity Total Return Index, which covers four major commodity sectors: energy, agriculture, industrial metals, and precious metals.

Nitesh Shah, head of commodities and macroeconomic research at the company's European funds, noted that commodities remain attractive investments and are insured against inflation. Moreover, inflation in Europe and the United States is now at its highest level in more than a decade.

The company also stated that the new fund is influenced by precious metals due to the physical copying of gold and silver. At the same time, total profit swaps are used to ensure the productivity of energy, agriculture, and industrial metals components.

WisdomTree is optimistic about gold and silver. Jeff Weniger, head of the equity strategy at WisdomTree, recommends investors diversify away from bonds and hold more commodities in 2022. He also explained that a balanced portfolio should include 60% investments in stocks, 30% in bonds, and 10% in commodities.

Meanwhile, rising inflationary pressures will keep Fed off the inflation curve, which will support commodity prices next year.