XTrackers Bloomberg Commodity ex-Agriculture & Livestock Swap UCITS ETF 2C

Issuer: Xtrackers

Asset Class: Commodity

TER: 55bps

Trading Currency: USD

Pays Income: False

Listing Date: 14 Jun 2010

Ticker: XBCU

ISIN: LU0460391732

This financial instrument provides investors with a way to gain exposure to the performance of a diversified basket of commodities, specifically excluding agricultural and livestock products. It serves as a strategic tool for portfolio diversification, as commodity returns often exhibit a low correlation to traditional asset classes like equities and fixed income. Furthermore, commodities are widely regarded as a potential hedge against inflation because their prices tend to rise during periods of increasing price levels throughout the economy. By investing in a broad range of commodities through a single product, investors can participate in the potential growth of the global economy and manage risks associated with individual commodity price fluctuations.

The underlying benchmark is designed to reflect the performance of key futures contracts across the energy, precious metals, and industrial metals sectors. A notable feature is its "optimum yield" methodology, which intelligently manages the process of rolling futures contracts from one month to the next. This strategy aims to mitigate the negative impact of "contango" (when future prices are higher than spot prices) and capitalize on the positive effects of "backwardation" (when future prices are lower than spot prices), potentially enhancing returns over time. The exclusion of agricultural commodities allows investors to focus their exposure on industrial and energy-related themes, avoiding risks unique to the food sector such as weather events and harvest yields. The product utilizes a synthetic, swap-based structure to efficiently track the index performance.