Skip to Content
ETF Specialist

Survival of the (Un)Fittest

The iPath DJ-UBS Commodity Index exchange-traded note's success is puzzling when there is a superior ETN option.

Mentioned: ,

Besides being uncollateralized loans to investment banks, many exchange-traded notes are larded with hidden fees and other harmful terms. A classic example is  iPath DJ-UBS Commodity Index ETN (DJP), which uses a devilish fee calculation to quietly shift more risk to investors at the worst times possible. However, the actions of some shouldn't necessarily condemn all. Despite many similarities with DJP,  ELEMENTS Rogers International Commodity ETN (RJI), a broad commodity index tracker, is a far better deal. Strangely, DJP has more than $2.4 billion in assets while RJI has less than $800 million, a clear instance of the inferior triumphing over the superior.

It's all really unfair. Even though it doesn't seem like it at first glance, RJI handily beats DJP on three major criteria: credit risk, fees, and diversification. Let's look at each in turn.

Samuel Lee does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.