SS&C ALPS Advisors Launches Diversified Natural Resources ETF
SS&C ALPS Advisors, a subsidiary of SS&C Technologies Holdings (Nasdaq: SSNC), has announced the launch of its ALPS | CoreCommodity Natural Resources ETF (Nasdaq: CCNR). This new ETF, developed in partnership with CoreCommodity Management, aims to offer investors exposure to natural resource equities, providing a potential hedge against inflation and opportunities for equity returns.
The fund adopts a 'pure play' approach, investing in upstream commodity-producing companies. CoreCommodity Management will employ an actively managed, quantitative, multi-factor process to evaluate the corporate fundamentals and market dynamics of portfolio companies. This strategic investment seeks to diversify portfolio risk and mitigate the impact of unexpected inflation.
However, the fund is new with operating history and carries inherent risks associated with natural resource investments, including market volatility, geopolitical factors, and concentrated production regions. Investors are advised to review the fund's prospectus for detailed information on objectives, risks, and charges.
- Launch of ALPS | CoreCommodity Natural Resources ETF (CCNR) potentially offers a new avenue for investor diversification.
- Strategic partnership with CoreCommodity Management enhances fund management capabilities.
- Targeting natural resource equities, the fund may provide a hedge against inflation.
- The fund has operating history, posing higher risks for investors.
- Investments in natural resource companies can be highly volatile and affected by geopolitical events.
- The concentration in natural resource sectors could lead to significant losses during sector downturns.
Insights
The launch of the ALPS | CoreCommodity Natural Resources ETF (CCNR) could be seen as a significant development for investors seeking diversified exposure to the natural resources sector. The active management approach, combined with a quantitative multi-factor process, aims to maximize real returns and potentially hedge against inflation. Historically, commodities have been a hedge against inflation, as their prices often rise during periods of inflation. This ETF's focus on upstream commodity-producing companies also means it could benefit from higher commodity prices, provided the management team can effectively navigate market dynamics.
However, investors should be aware of the inherent risks involved. The fund is new and thus lacks a track record. Investment in natural resource companies is subject to a range of risks, from global economic shifts to political and environmental events. Additionally, the performance of natural resource equities may not always correlate with the underlying commodities, introducing another layer of complexity.
For retail investors, this ETF could offer a strategic diversification tool, albeit with significant risks. It’s important to review the fund’s prospectus and understand the cost structure and strategy before investing.
The creation of this new ETF by SS&C ALPS Advisors shows a continuing trend towards thematic and niche ETFs that cater to more specific investor demands. The 'pure play' approach is particularly interesting because it focuses solely on upstream commodity companies, potentially providing more direct exposure to commodity price movements, as opposed to a broader index that might dilute such exposure. This could be appealing in a market where inflationary pressures are a concern.
Potential market dynamics to consider include geopolitical risks, supply chain disruptions and regulatory changes affecting natural resource production. Additionally, the fund’s active management strategy suggests a higher expense ratio compared to passive ETFs, which may affect net returns over time. Investors should weigh these factors along with their personal investment goals and risk tolerance.
"This commodity-oriented equity ETF offers a strategic gateway to global economic shifts and natural resource dynamics, providing investors with a potential hedge against inflation and participation in equity returns," said Laton Spahr*, Portfolio Manager and President of SS&C ALPS Advisors. "CCNR offers access to natural resources equities and is actively managed in an ETF wrapper to capture commodity growth opportunities."
The Fund employs a "pure play" approach to gaining exposure to natural resources by investing in a portfolio of equity securities of upstream commodity producing companies. CoreCommodity Management, the Fund's sub-adviser, uses an actively managed, quantitative, multi-factor process which evaluates the corporate fundamentals, commodity relationships and market dynamics of the portfolio companies. Gaining exposure to natural resources via the CCNR ETF may help diversify overall portfolio risk and mitigate the impact of high unexpected inflation during periods of rising prices for natural resources.
Bradford L. Klein, Co-Founder of CoreCommodity Management added, "CCNR will allow ETF investors for the first time to directly access our actively managed, pure play global natural resource equity strategy. We are pleased to broaden our partnership with SS&C ALPS Advisors and to expand our business of partnering with investment firms to provide differentiated commodity and natural resources solutions."
Fund Objective
The ALPS | CoreCommodity Natural Resources ETF seeks to maximize real returns, consistent with prudent investment management.
Important Disclosures
An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus containing this and other information, call 1-866-759-5679 or visit www.alpsfunds.com. Read the prospectus carefully before investing.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemable.
All investments are subject to risks, including the loss of money and the possible loss of the entire principal amount invested. Additional information regarding the risks of this investment is available in the prospectus.
The Fund is new and has limited operating history.
Diversification does not eliminate the risk of experiencing investment losses.
The Fund's investments in securities of natural resource companies involve risks. The market value of securities of natural resource companies may be affected by numerous factors, including changes in overall market movements; economic, geographical or financial events; events occurring in nature; inflationary pressures; and domestic and international politics. Because the Fund invests significantly in natural resource companies, there is the risk that the Fund will perform poorly during a downturn in the natural resource sector. Certain natural resources may be produced in a limited number of countries and may be controlled by a small number of producers. As a result, political, economic and supply related events in such countries could have a disproportionate impact on the prices of such natural resources and the value of securities of companies involved in such natural resource. Another principal risk of investing in the Fund is equity risk, which is the risk that the value of the securities held by the Fund will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate or factors relating to specific companies in which the Fund invests. The Fund's investments in non-US issuers may be even more volatile and may present more risks than investments in US issuers. Equity investments in natural resources-related companies may not move in the same direction and to the same extent as the underlying natural resources.
Active Management: the practice of selecting individual investments with discretion. The opposite of Passive Management.
Pure Play: refers to a publicly traded company that is focused on only one industry or product.
* Laton Spahr is a Registered Representative of ALPS Distributors, Inc.
ALPS Advisors, Inc. and CoreCommodity Management, LLC, registered investment advisers with the SEC, are the investment adviser and sub-adviser to the Fund, respectively. ALPS Advisors, Inc., ALPS Distributors, Inc. and ALPS Portfolio Solutions Distributor, Inc., affiliated entities, are unaffiliated with CoreCommodity Management, LLC.
ALPS Portfolio Solutions Distributor, Inc. is the distributor for the Fund.
Not FDIC Insured • No Bank Guarantee • May Lose Value
About SS&C Technologies
SS&C is a global provider of services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in
About SS&C ALPS Advisors
SS&C ALPS Advisors, a wholly-owned subsidiary of SS&C Technologies, is a leading provider of investment products for advisors and institutions. With over
About CoreCommodity Management
CoreCommodity Management, LLC is an independent investment advisor providing investment management services to institutional and individual investors seeking commodities exposure. CoreCommodity's Co-Founders, Adam De Chiara and Bradford L. Klein, have extensive experience in building, managing and innovating investments in commodities. Among their notable accomplishments, CoreCommodity's executive team was responsible for the design of the Bloomberg Commodity Index and the Refinitiv / CoreCommodity CRB Index, two of the most renowned commodity indices globally.
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SOURCE SS&C / ALPS Advisors
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