NEUBERGER BERMAN COMMODITY STRATEGY FUND CONVERTS TO ACTIVE ETF
Neuberger Berman has successfully converted its Commodity Strategy Fund into the Neuberger Berman Commodity Strategy ETF, trading on NYSE ARCA under the symbol NBCM. The ETF starts with approximately $196 million in assets and offers daily transparency and intraday tradability. The investment strategy remains unchanged and will focus on commodity-linked derivatives with an active risk-balanced approach. Neuberger Berman currently manages $408 billion in client assets.
- Successful conversion to an active ETF structure increases accessibility and transparency for investors.
- Approximately $196 million in assets at launch indicates strong initial interest.
- Investment strategy retained, building on over 10 years of track record with existing portfolio managers.
- Investment in commodities may expose the ETF to heightened market volatility and risk.
- ETF shares may trade at a premium or discount to net asset value (NAV), affecting shareholder returns.
NEW YORK, Oct. 24, 2022 /PRNewswire/ -- Neuberger Berman, a private, independent, employee-owned investment manager, announced the successful conversion of the Neuberger Berman Commodity Strategy Fund into an active, fully transparent ETF called Neuberger Berman Commodity Strategy ETF (the "ETF"). The ETF, which begins trading today on the NYSE ARCA under the symbol "NBCM," has approximately
The conversion expands the firm's existing active ETF offerings and brings daily transparency, intraday tradability, and ease of access to an asset class implemented both tactically and strategically within portfolios.
Building on the mutual fund's track record of more than 10 years, the investment strategy and the portfolio managers, Hakan Kaya, PhD, David Wan, and Michael Foster, remain unchanged.
"The firm continually assesses where our investment expertise intersects with client demand and preference for an ETF vehicle," said Scott Kilgallen, Head of North America Intermediary Client Coverage. "Commodities can enhance strategic asset allocation by providing diversification benefits while potentially mitigating the effects of inflation."
The ETF invests in commodity-linked derivatives with an active risk-balanced, diversified approach that seeks to minimize the effects of market volatility. Tactical exposure adjustments expand potential alpha sources by considering top down macro variables among commodity sectors along with individual commodity outlooks to take advantage of short and long-term opportunities. The ETF's fixed income holdings are actively managed and designed to preserve capital and serve as collateral for the ETF's derivative positions, while also seeking to generate additional yield.
Neuberger Berman's ETF offerings complement our mutual fund, closed-end fund, and SMA businesses to expand investor choice when selecting the vehicles that best align with how they build portfolios.
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity, real estate and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 26 countries, Neuberger Berman's diverse team has over 2,600 professionals. For eight consecutive years, the company has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). Neuberger Berman is a PRI Leader, a designation, since last assessed, that was awarded to fewer than
Media Contact: Alex Samuelson, 212 476 5392, Alexander.Samuelson@NB.com
An investor should consider Neuberger Berman Commodity Strategy ETF's (the "Fund") investment objectives, risks and fees and expenses carefully before investing. This and other important information can be found in the Fund's prospectus, and if available summary prospectus, which you can obtain by calling 877.628.2583. Please read the prospectus, and if available the summary prospectus, carefully before making an investment.
Past performance does not guarantee future results. Information is as of the date indicated and is subject to change without notice.
All ETF products are subject to risk, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions, including adverse issuer, political, regulatory, market, economic or other developments that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. An individual security may be more volatile, and may perform differently, than the market as a whole.
Unlike certain ETFs, the Fund may effect its creations and redemptions in cash or partially in cash. As a result, an investment in the Fund may be less tax-efficient than an investment in other ETFs.
The Fund invests in commodity-related instruments through its Cayman Islands subsidiary, Neuberger Berman Cayman Commodity Fund I Ltd (the "Subsidiary"). The Fund's and the Subsidiary's significant investment exposure to the commodities markets and/or a particular sector of the commodities markets may subject the Fund and the Subsidiary to greater volatility than investments in traditional securities. The commodities markets are impacted by a variety of factors, including changes in overall market movements, resource availability, commodity price volatility, speculation in the commodities markets, domestic and foreign political and economic events and policies, war, acts of terrorism, changes in domestic or foreign interest rates and/or investor expectations concerning interest rates, domestic and foreign inflation rates and investment and trading activities in commodities. To the extent the Fund focuses its investments in a particular commodity in the commodities market, the Fund will be more susceptible to risks associated with the particular commodity. No active trading market may exist for certain commodities investments. Because the Fund's and the Subsidiary's performance is linked to the performance of potentially volatile commodities, investors should be willing to assume the risks of significant fluctuations in the value of the Fund's shares.
Unlike mutual funds, ETF shares are purchased and sold in secondary market transactions at negotiated market prices rather than at net asset value ("NAV") and as such ETFs may trade at a premium or discount to their NAV. As a result, shareholders of the Fund may pay more than NAV when purchasing shares and receive less than NAV when selling Fund shares. ETF shares may only be redeemed at NAV by authorized participants in large creation units. There can be no guarantee that an active trading market for shares will develop or be maintained or that the Fund's shares will continue to be listed. The trading of shares may incur brokerage commissions. The Fund has a limited number of Authorized Participants. To the extent they exit the business or are otherwise unable to proceed in creation and redemption transactions with the Fund and no other Authorized Participant is able to step forward to create or redeem, shares of the Fund may be more likely to trade at a premium or discount to NAV and possible face trading halts or delisting. Unexpected episodes of illiquidity, including due to market factors, instrument or issuer-specific factors and/or unanticipated outflows, could have a significant negative impact on the Fund's NAV, liquidity, and brokerage costs. To the extent the Fund's investments trade in markets that are closed when the Fund is open, premiums or discounts to NAV may develop in share prices.
Shares in the Fund may fluctuate based on interest rates, market condition, credit quality and other factors. In a rising interest rate environment, the value of the Fund's fixed income investments is likely to fall. The value of asset-backed securities will be influenced by the factors affecting the assets underlying the securities. These securities tend to be more sensitive to changes in interest rates than other types of debt securities. In addition, investments in asset-backed securities may be subject to prepayment risk and extension risk, call risk, credit risk, valuation risk, and illiquid investment risk, sometimes to a higher degree than various other types of debt securities.
Use of derivatives is a highly specialized activity that can involve investment techniques and risks different from, and in some respects greater than, those associated with investing in more traditional investments, such as stocks and bonds. Derivatives can be highly complex and highly volatile and may perform in unanticipated ways. Derivatives can create leverage, and the Fund could lose more than the amount it invests; some derivatives can have the potential for unlimited losses. Derivatives may at times be highly illiquid, and the Fund may not be able to close out or sell a derivative at a particular time or at an anticipated price. Derivatives can be difficult to value and valuation may be more difficult in times of market turmoil. There may be imperfect correlation between the behavior of a derivative and that of the reference instrument underlying the derivative. Suitable derivatives may not be available in all circumstances, and the e can be no assurance that the Fund will use derivatives to reduce exposure to other risks when that might have been beneficial.
Futures contracts are subject to the risk that an exchange may impose price fluctuation limits, which may make it difficult or impossible for a fund to close out a position when desired.
Foreign securities, including emerging markets, involve risks in addition to those associated with comparable U.S. securities. Additional risks include exposure to less developed or less efficient trading markets; social, political, diplomatic, or economic instability; trade barriers and other protectionist trade policies (including those of the U.S.); significant government involvement in an economy and/or market structure; fluctuations in foreign currencies or currency redenomination; potential for default on sovereign debt; nationalization or expropriation of assets; settlement, custodial or other operational risks; higher transaction costs; taxes; and less stringent auditing, corporate disclosure, governance, and legal standards.
High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. The COVID-19 health pandemic has negatively affected and may continue to affect the economies of many nations, individual companies and the global securities and commodities markets. This has impacted and may continue to impact the issuers of the securities held by the Fund.
These and other risks are discussed in more detail in the Fund's prospectus. Please refer to the prospectus for a complete discussion of the Fund's principal risks.
This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Neuberger Berman is not providing this material in a fiduciary capacity and has a financial interest in the sale of its products and services. Investment decisions and the appropriateness of this material should be made based on an investor's individual objectives and circumstances and in consultation with his or her advisors. Accordingly, "retail" retirement investors are not the intended recipient of this material as they are expected to engage the services of an advisor in evaluating this material for any investment decision. If your understanding is different, we ask that you inform us immediately.
All Neuberger Berman information is as of September 30, 2022, unless otherwise indicated and is subject to change without notice. Firm data, including employee and assets under management figures, reflects collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC. Firm history/timeline includes the history of all firm subsidiaries, including predecessor entities and acquisitions.
This material is being issued on a limited basis through various global subsidiaries and affiliates of Neuberger Berman Group LLC. Please visit www.nb.com/disclosure-global-communications for the specific entities and jurisdictional limitations and restrictions. The "Neuberger Berman" name and logo are registered service marks of Neuberger Berman Group LLC. © 2022 Neuberger Berman Group LLC. All rights reserved.
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FAQ
What is the Neuberger Berman Commodity Strategy ETF (NBCM)?
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What investment strategy does NBCM employ?
What are the risks associated with investing in NBCM?
