LBBW Rohstoffe 1

The mix tips the scales

There is considerable demand for commodities. Given the growth of the global population and the economic upturn in the emerging markets, demand will likely continue to rise in the future as well. The LBBW Rohstoffe 1 commodity fund takes part in the increasing value of the international commodity and commodity futures markets indirectly via the LBBW TOP-10-Commodities-Index ER.

The investment universe for the index consists of 15 commodities from the three sectors of precious metals (gold, silver and platinum), energy (gasoline, natural gas, heating oil, Brent oil, WTI oil and gas oil) and industrial metals (aluminum, copper, nickel, zinc, lead and tin). Agricultural commodities and livestock farming have been excluded from the investment universe of LBBW Rohstoffe 1 since October 2012. LBBW TOP-10-Commodities-Index ER shows the futures contracts of the ten commodities with the strongest backwardation. If no or too few commodities are in a backwardation scenario, the commodities with the weakest contango are used. The commodities are reviewed every three months, swapped out if necessary, and given an initial weighting of ten percent each. In the interest of a balanced fund composition, upper and lower limits apply for each sector.

The LBBW Rohstoffe 1 participates in the increasing value directly via a swap on the LBBW TOP-10-Commodities-Index ER. Currency risks can almost entirely be ruled out. The management invests the fund's liquid assets in short-term fixed-income securities from the Eurozone with very good credit ratings.

Commodities investment class: explanation

In the investment class of commodities, the desired goods are generally obtained via futures on the futures exchanges. In order to prevent physical goods from being delivered, these must be swapped out for new contracts ("rolled") prior to maturing. If the price of the next future is lower than that of the expiring future, the result is roll gains, whereas the inverse yields roll losses. This is considered a contango scenario (roll losses) or backwardation (roll gains).

Fund Profile LBBW Rohstoffe 1