BlackRock has launched an exchange traded fund (ETF) providing exposure to a variety of commodity markets for investors seeking portfolio diversification tools, at a time when the correlation between historically uncorrelated asset classes is rising.

The iShares Diversified Commodity Swap UCITS ETF (ICOM, ‘the fund’) delivers exposure to 20 different commodities representing 5 sectors including: energy, agriculture, industrial metals, precious metals and livestock.

The fund seeks to replicate the performance of the Bloomberg Commodity USD Total Return Index. This index aims to represent commodities that are of importance and economic significance to the world economy, while capping each sector at 33 per cent and each single commodity at 15 per cent.

The fund uses unfunded total return swaps to achieve this exposure, which is more operationally practical than holding physical commodities such as precious metals or livestock. The fund has a total expense ratio of 0.19 per cent.

Fergus Slinger, Co-Head of iShares Sales EMEA, commented: