MutualFundWire.com: A $1.4T-AUM Firm Adds an Agriculture Futures ETF

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Monday, August 29, 2022

A $1.4T-AUM Firm Adds an Agriculture Futures ETF

A $1.449-trillion-AUM (as of July 31) asset manager's team is rolling out an agriculture futures fund designed to complement another fund they already offer.

Anna Paglia
Invesco Ltd.
Head of ETFs and Indexed Strategies

Last week, Anna Paglia, global head of ETFs and indexed strategies at Invesco Ltd. [profile], and Kathy Kriskey, product strategist for commodities and alternatives ETFs, unveiled the launch of the Invesco Agriculture Commodity Strategy No K-1 ETF (PDBA on the Nasdaq), a series of the Invesco Actively Managed Exchange-Traded Commodity Fund Trust. The fund's inception date was August 24, and as of August 26 it held $9.1 million in AUM.

PDBA comes with an expense ratio of 59 basis points. That includes a three-bps fee waiver that Invesco has promised through August 31, 2024.

Invesco Capital Management LLC serves as PDBA's investment advisor, and Invesco Distributors, Inc. serves as the new fund's distributor. PDBA will be PMed by: David Hemming, head of alternatives portfolio management at Invesco; Peter Hubbard, head of equities and director of portfolio management; and Theodore Samulowitz, senior portfolio manager.

PDBA is an actively managed ETF designed to principally invest in commodity ETFs. It is a '40 Act fund, meant complement the Invesco DB Agricultural Fund (DBA), a $1.5351-billion-AUM, 15-year-old commodity pool. DBA issues a schedule K-1 tax form, as it's governed by the 1933 Act. In contrast, the new PDBA is a 1940 Act fund, so it does not issue a K-1, hence the name. The idea, according to the Invesco team, is for investors to be able to choose between the two funds based on which tax structure works better for them.

Paglia notes that the launch of PDBA builds on Invesco's "history of strategically launching new commodity ETFs that pioneer easy and cost-effective exposure to sectors, like agriculture, that may otherwise be difficult for investors to access." Kriskey puts the launch in the context of the global economic importance of agriculture.

"PDBA provides exposure to a variety of futures contracts including grains, livestock and soft commodities with an updated tax structure that issues a form 1099 rather than a K-1," Kriskey states.

The new fund's other service providers include: Bank of New York Mellon (BNY Mellon) as administrator, custodian, fund accounting and dividend disbursing agent, and transfer agent; PricewaterhouseCoopers LLP (PwC) as independent accounting firm; and Stradley Ronon Stevens & Young, LLP as counsel.

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