Unveiled just three weeks ago, the Source Bloomberg Commodity UCITS ETF (LON: CMOD) has reached $925m in assets under management, becoming the fastest-growing European ETF of the last five years.

Chris Mellor, Executive Director, Product Management, at Source.

Factors driving interest in the fund include the popularity of the underlying Bloomberg Commodity Index, a rebound in global commodity markets during 2016, and fund fees of just 0.40%, the lowest charges of any broad commodities ETF. The fees comprise an ongoing charge of 0.19% and a swap fee of 0.21%.

Chris Mellor, Executive Director, Product Management at Source, observed: “Investors have been crying out for a more competitively priced, simple commodity ETF and the rapid growth in Source’s new ETF reflects this. Prior to this launch the lowest cost ETF tracking a first-generation commodity index had an ongoing charge of 0.35% and a total cost of 0.75%, almost twice as much as our new fund.”

Launched in 1998 and covering 20 different commodities, the Bloomberg Commodity Index has become a leading benchmark for the broad commodity market. It is well diversified and contains components in the agriculture (currently 26.8% index weight), energy (38.8%), industrial metals (16.9%), precious metals (13.3%) and livestock (4.2%) sectors. The index caps (max 15%) and floors (min 2%) the exposure of any one commodity in the index, resulting in a more balanced index weighting.

In order to maintain commodity exposure, the index rolls near-term futures contracts every two months over a 5-day roll period.

It returned 12.0% in 2016.

Source currently manages over $4.5bn in assets across all commodity exchange-trade products and $23bn across its entire ETP range, which also includes equity, fixed income and alternative products.