eToro, WisdomTree launch dynamic commodity investment portfolio
eToro and WisdomTree offer a dynamic commodity portfolio
Global trading platform eToro has partnered with WisdomTree, a leading provider of exchange-traded funds (ETFs) and exchange-traded products (ETPs), to introduce a new portfolio designed for diversified commodity investments.
This innovative portfolio dynamically adapts to market conditions, offering investors a new way to gain exposure to commodities, according to eToro.
Addressing commodity market volatility
In 2024, several commodities hit record-high prices due to a combination of macroeconomic factors and global events. Gold experienced a significant surge amid Federal Reserve rate cuts and geopolitical tensions, while extreme weather conditions drove up cocoa and coffee prices. Meanwhile, long-term trends, such as the green energy transition and advancements in artificial intelligence, have increased demand for industrial metals like copper, silver, and platinum.
A Smart and diversified approach
The newly launched WisdomTree-Comm Smart Portfolio integrates two levels of investment strategies. The foundation, accounting for 80% of the portfolio, is the WisdomTree Enhanced Commodities UCITS ETF. This component covers agriculture, energy, precious metals, and industrial metals, ensuring a well-diversified allocation.
The remaining 20% is dynamically rebalanced monthly and consists of four equally weighted single-commodity ETPs. Selected from a pool of 13 non-agricultural commodities, these ETPs are chosen based on three key criteria: recent performance momentum, favorable term structures (roll yield), and low volatility.
Expert insights
“Commodities can provide diversification and resilience to an investment portfolio, as they benefit from high inflation and interest rates, unlike stocks and bonds,” explained Gil Shapira, Chief Investment Officer at eToro. “In partnership with WisdomTree, Europe’s largest provider of commodity ETPs, our goal is to offer users a simple, diversified, and less volatile way to invest in a broad range of commodities over the long term.”
Adrià Beso, Head of Digital Distribution at WisdomTree, highlighted the portfolio’s advantages, stating, “This dynamic model portfolio simplifies access to the commodities market through a one-stop solution, making it easier for investors to build diversified portfolios and benefit from the unique characteristics of commodities.”
Investment accessibility
eToro’s Smart Portfolios are designed for long-term exposure to various market themes. Investors can start with an initial deposit of $500 and access tools, performance charts, and sector updates through eToro’s social feed.
This partnership marks a significant step toward enhancing the accessibility of commodity investments, offering retail investors a streamlined solution to navigate an ever-changing market landscape.
Earlier, eToro announced a partnership with Stocktwits, the world’s largest social media platform for traders and investors.
