WisdomTree Enhanced Commodity Strategy (GCC)

[runforfun]

Is anyone currently using or considering GCC (WisdomTree Enhanced Commodity Strategy ETF)?

It launched Dec 2020 so fairly new with assets at $193M. Following the inflation theme, I find the strategy interesting with the ability to invest up to 5% of assets in bitcoin futures. My thought is to use this along with INFL (Horizon Kinetics Inflation Beneficiaries ETF).

From WisdomTree, "The WisdomTree Enhanced Commodity Strategy Fund is an actively managed exchange-traded fund and intends to provide broad-based exposure to the following four commodity sectors: Energy, Agriculture, Industrial Metals, and Precious Metals primarily through investments in futures contracts. The Fund may also invest up to 5% of its net assets in bitcoin futures contracts."

WisdomTree

Morningstar

[uncleharley]

The daily chart looks bullish.  The weekly chart goes back to 2016.  How do you explain the 2020 launch date?


stockcharts.com/h-sc/ui?s=GCC&p=W&b=3&g=0&id=p99779635457&listNum=86&a=1057604369

[Capital]

uncleharley , I clicked the "inspect' button and refreshed and all graphic info prior to 12/2020 went away when I refreshed.

[runforfun]

uncleharley, the fund was reorganized in Dec 2020. Originally, it was WisdomTree Continuous Commodity Index Fund (GCC) which is why you're seeing the charts go back. On a good note, no more K-1. 

"WisdomTree (NASDAQ: WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager, today announced the completion of the reorganization of the WisdomTree Continuous Commodity Index Fund (“CCIF”) into and with the WisdomTree Enhanced Commodity Strategy Fund. The Enhanced Commodity Strategy Fund is organized under the Investment Company Act of 1940, as amended, with no Schedule K-1 and an expense ratio of 0.55%."

Reorganization Announcement

SEC 8-K Filing

[richardsok]

I was aware of GCC, but always avoided it b/c there were other commodity ETFs that did not issue a K-1. (COMB, for example). Good to learn GCC is transforming.

Would like to know how they are generating that 9.6% distribution; options, ROC, what? Clearly that's a device to attract little investors (aka "dumb money"). Don't know any other commodity asset throwing off that kind of yield.

GCC tracked quite closely to COMB for a long time, until very recently about the time of its last distribution, or maybe when they made the "no K-1" switch. Hasn't rallied since.

But DBC has clearly outclassed them both over the last 12 months.

[runforfun]

richardsok, I hadn't looked at the distribution. Guess I missed it since most of the sites report "-" or "NA" for the yield. Looks like the 2021 distribution all came on 10/14 as ordinary income. No CGs or ROC. My guess is their "enhanced roll" technique worked in the strengthening commodities market over the past year. From the funds prospectus.

"In order to maintain exposure to a futures contract on a particular commodity, the Fund must sell the position in the expiring contract and buy a new position in a contract with a later delivery month, which is referred to as “rolling.” The Fund expects to employ an “enhanced roll” process by attempting to roll from an expiring futures contract to another futures contract in seeking to generate a greater yield for the Fund. This roll process, generally implemented monthly, aims to maximize the potential roll benefits in backwardated markets and minimize potential losses in contango markets by rolling, as applicable, to the futures contract on a particular commodity which generates the maximum implied yield."

Regardless, my interest stems more from the commodities exposure, not so much distributions. Thanks for mentioning COMB. I'll take a look. 


Prospectus

[Deleted]

Any thoughts on another non-K-1 etf - BCI? What sort of allocation %age are folks using for commodities?

[chang]

Nov 6, 2021 15:42:58 GMT richardsok said:

Don't know any other commodity asset throwing off that kind of yield.

Richard, M* says PCRIX is yielding 21.9%.

www.morningstar.com/funds/xnas/pcrix/quote

[oldskeet]

Hi slooow, I am using an oef (BICSX) for my commodity strategy fund. It does not have the yield of PCRIX but it does have a wider brush to it's strategy as it is comprised of commodity paper, US Treasuries, cash and hold stocks of a good number of the producers, etc.  I purchased this fund in early of 2020 (towards its trough) and it has performed well for me.

BICSX Fund Facts: www.blackrock.com/us/individual/products/227418/blackrock-commodity-strategies-inst-class-fund

For me, because of its wide commodity brush, and thus far good performance, I have tucked it in as a buy and hold position although I opened it as a special investment position (spiff).  I hold it in my hybrid income sleeve as one of my four niche funds along with thinking that it would be a good hedge against inflation.  Again, thus far I am pleased.  How much upside is left?  I really do not know but staying with it.

[uncleharley]

I ran a weekly chart on BICSX using the stockcharts correlation tool and othe indicators.  Over the past 5 yrs or so the price of the fund seems to be highly correlated with the price of WTIC.  I have not checked to see if it might be overweight in oil, but that might be a factor to consider.

[yogibearbull]

The commodity funds may behave quite differently. Some follow benchmarks that overweight/underweight oil/energy, others make dynamic selections among commodities (really futures).

[oldskeet]

Hi uncleharley , It is about 40% in energy. It looks to be about half in commodity paper and half in stocks. Old_Skeet

[uncleharley]

GCC set a new closing high last week and weekly momentum has turned up. Maybe I'll open a position on monday.