Direxion Auspice Broad Commodity Strategy ETF (COM)

What is COM, and what does it track?

The Direxion Auspice Broad Commodity Strategy ETF (COM) gives investors exposure to twelve commodity futures contracts selected for their economic breadth and liquidity: crude oil, heating oil, natural gas, gasoline, copper, gold, silver, wheat, soybeans, corn, cotton, and sugar. Rather than buying physical commodities or holding a static allocation, COM employs a systematic trend-following system that adjusts each contract’s position—long, neutral, or cash—based on price momentum. The fund launched in 2017 and has roughly 266 million in assets under management.

How does the trend-following strategy work?

COM does not attempt to time commodity prices or pick the year’s winners in advance. Instead, it uses a quantitative model to identify whether each commodity is in an uptrend, downtrend, or sideways consolidation. When a commodity shows positive momentum and technical strength, the fund takes or holds a long position in its futures contract. When prices reverse or momentum fades, the fund flattens the position and moves to cash or Treasury exposure. This means COM can capture rallies in buoyant commodities (such as crude oil in times of supply tightness) while reducing downside exposure during bear markets. The strategy is mechanical and emotionless; it substitutes disciplined rules for human judgment.

What are the main risks of this approach?

Trend-following works well in strong bull or bear markets, where momentum is clear and persistent, but it can hemorrhage money in choppy, sideways markets where prices ping-pong between lows and highs. Every false signal generates a loss as the fund rotates positions. Because commodities are volatile, with sudden reversals caused by geopolitical shocks, weather, or macroeconomic surprises, the trend filter can lag, locking in drawdowns just as prices recover. A spike in energy demand during a supply disruption, for example, might boost crude oil sharply before the model registers the uptrend, or conversely, a policy surprise might deflate prices faster than the model can exit. COM’s expense ratio is 0.72 percent annually, a reasonable cost for an active strategy, but that ongoing fee compounds over years of sideways trading.

How liquid is the fund, and how does it compare to alternatives?

COM trades actively on the NYSE Arca with tight spreads, making it accessible for daily investors and rebalancing. It is one of the more liquid commodity-futures ETFs available, though it sits smaller than some broad commodity benchmarks. The main alternative is static allocation funds or leveraged commodity products that offer higher or lower volatility profiles. COM’s appeal is its active discipline: it is neither a buy-and-hold bet nor a leveraged gamble. For investors who believe commodity supercycles can be both identified and timed via trend-following, and who are comfortable with the whipsaw risk, COM provides a systematic, low-friction vehicle for that thesis.

How would a reader research COM?

Start with Direxion’s fact sheet and methodology documents, which detail the quantitative rules driving the fund’s rebalancing and the specific weighting scheme across the twelve futures contracts. Read the prospectus carefully to understand how frequently the fund rebalances (typically monthly) and what costs accompany rapid position turnover. Watch the individual commodity prices—crude oil, copper, wheat—and compare them to the fund’s recent price action to get a feel for whether the trend model is in sync with actual trends or lagging. Bloomberg and Reuters provide commodity-futures quotes and sentiment measures (term structure, open interest) that inform whether the market is pricing in near-term rallies or reversals. A long-term holder should study historical commodity cycles and whether trend-following systems have delivered returns commensurate with their transaction costs and drawdown risk over the fund’s eleven-year history.