iPath Pure Beta Broad Commodity ETN (BCM)

Overview

The Barclays Commodity Index Pure Beta Total Return represents a strategic approach to commodity investment. It is an advanced index composed of a diversified basket of exchange-traded futures contracts on physical commodities. Unlike traditional commodity investments, this index utilizes an innovative methodology to select futures contracts. This method, known as the Barclays Pure Beta Series 2 Methodology, aims to optimize returns by carefully choosing from a range of futures contracts with different expiration dates for each commodity in the portfolio. The essence of this strategy lies in its ability to potentially enhance returns for investors by selectively rolling into futures contracts, thereby avoiding some of the pitfalls associated with the traditional approaches to commodity index investments, such as negative roll yields. The index offers a way for investors to gain exposure to the commodities market through an unleveraged investment in futures contracts, reflecting the possible returns from such physical commodities.

Products and Services

• Exchange Traded Futures Contracts

  At the core of the Barclays Commodity Index Pure Beta Total Return are the exchange-traded futures contracts on physical commodities. These contracts are standard legal agreements to buy or sell a physical commodity at a predetermined price at a specified time in the future. The commodities can range from agricultural products to metals and energy sources. The index includes a diverse selection of these contracts, providing investors with broad exposure to the commodities market.

• Barclays Pure Beta Series 2 Methodology

  This inventive strategy is pivotal to the index's operation and stands out as a distinct service. The Pure Beta Series 2 Methodology differentiates itself by employing a systematic approach to select futures contracts across a variety of expiration dates for each commodity. This methodology aims to mitigate some of the inherent risks in commodities futures trading, such as contango and backwardation. It is designed to optimize the selection of futures contracts to potentially maximize the returns from these commodities investments.