RICI
iShares Diversified Commodity Swap UCITS ETF USD
Published by Radif Partners · Updated
Overview
iShares Diversified Commodity Swap UCITS ETF USD (RICI) tracks the Bloomberg Commodity (Total Return) index synthetically, through a swap agreement rather than by holding the constituents, and is managed by iShares. Dividends are reinvested inside the fund rather than paid out, so RICI suits investors building a position over time. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.19% of assets, and the fund holds 63M under management. Over five years the fund returned 12.7% a year on average, against 11.2% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2020-08-07, the fund is denominated in USD and has 6 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because RICI accumulates, nothing is taxed while the shares are held: the charge falls on disposal, against your capital gains allowance in a general account, and not at all inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
Ongoing charges of 0.19% place this fund 7th of 23 comparable funds, whose median is 0.35%. On £10,000 that costs about 19 a year and 190 over ten years at a constant amount, deducted daily and never visible on a statement: it shows up in the gap between the fund's return and its index's. At this level, neither low enough to be an argument nor high enough to be an obstacle, the decision rests elsewhere: on the index tracked, on the distribution policy, and on what your broker charges to buy.
This fund tracks Bloomberg Commodity (Total Return) through a swap: it does not hold the index constituents but a collateral basket, and exchanges that basket's return for the index's with a bank. Two consequences are real. It introduces counterparty risk, bounded by collateral revalued daily and by regulation, but not zero. And it makes possible what direct holding cannot: tracking an index closed to direct purchase, or avoiding withholding tax on dividends, which is why a synthetic fund sometimes beats its physical twin after tax. The swap's cost does not appear in the ongoing charge; it shows up in tracking difference measured over several years.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is accumulated: dividends from the holdings are reinvested inside the fund rather than paid out. In a taxable account that defers taxation to the moment of sale instead of triggering it annually, leaving the whole return at work, and that is the main advantage of this share class. Two qualifications go with it. A holder who needs income has to sell units to obtain it, which is one more decision to take and sometimes at a bad moment. And the deferral is not universal: some countries tax a notional annual return whatever the distribution policy, in which case the accumulating class changes nothing.
At 63 million in assets, this fund is small, and size is the main risk here, ahead of the index's volatility. A fund that stays below its issuer's viability threshold ends up merged or wound up, and both happen without your consent: liquidation forces a sale on a date you did not choose, hence a taxable gain at the wrong moment, and a merger moves you to an index that is not quite the one you picked. Assets falling year after year are the signal to watch, more than the absolute level. At this size the spread between buying and selling price is also wider, which costs on every order.
Bloomberg Commodity (Total Return) is a broad index, and that is the building block most portfolios have reason to own before any other, for a simple reason: it requires no forecast. Two points deserve checking before calling it diversified. Cap weighting concentrates the portfolio on the largest companies, so the top ten holdings can make up a substantial share, and that concentration grows without any rule changing. And the geographic scope matters: a developed-world index leaves out emerging markets, while a broad US index is not global exposure despite the international revenue of the companies it holds.
Over one year the fund shows 26.6% against 12.7% annualised over five years: the recent year sits well above the long average. A gap in that direction mainly counsels care about the entry point, since what has risen sharply lately costs more today than a year ago, and the long average is the figure that best describes what to expect.
0.19%
63M
63M USDMedium
15
Synthetic
Accumulating
USD
IE
Bloomberg Commodity (Total Return)
iShares
2020-08-07 (6 years)
Contextual Analysis
Fund Size
With 63M in assets, this is a small fund, watch out for spreads and closure risk.
Fee Positioning
A TER of 0.19% is in line with the market average (~0.35%).
Track Record
Launched in 2020-08-07, this fund has 6 years of history, enough to evaluate consistency.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | +2.0% |
| 3 Months (est.) | – | +6.1% |
| 6 Months (est.) | – | +12.5% |
| YTD (est.) | – | +10.3% |
| 1 Year | +26.6% | +26.6% |
| 3 Years | +11.2% | +37.4% |
| 5 Years | +12.7% | +81.4% |
| Since inception (6y) | +16.8% | +154.2% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
Select your country in the menu to see available brokers and wrappers.
About this ETF
The iShares Diversified Commodity Swap UCITS ETF USD tracks the Bloomberg Commodity (Total Return) index. It is managed by iShares using synthetic replication and follows a accumulating distribution policy. The fund is denominated in USD and domiciled in IE. It has a total expense ratio (TER) of 0.19%.
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Frequently asked questions
What do RICI's 0.19% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £1.90 a year and roughly £19 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
How do you buy RICI, and on which venue?
Through any broker that lists ISIN IE00BDFL4P12. The same strategy often exists in several share classes with different fees and distribution policies, and what counts is the class you buy rather than the one you read about: check the ISIN, not the name. A limit order avoids paying the spread of a thin order book, particularly outside the trading hours of the underlying markets.
Is RICI genuinely diversified?
Less so than the number of holdings suggests. Bloomberg Commodity (Total Return) weights its constituents by market capitalisation, so the largest companies make up a share of the fund far above their number, and that concentration deepens without any rule changing. The useful check is the weight of the top ten holdings, published monthly by iShares: that figure says how many companies the outcome actually depends on.
What should you re-check on RICI once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of Bloomberg Commodity (Total Return), which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
What risk comes with RICI's synthetic replication?
The fund does not hold the constituents of Bloomberg Commodity (Total Return): it exchanges the return of a collateral basket for the index's return with a bank. The risk is therefore that the bank fails, which UCITS rules bound and collateral revalued daily covers. In exchange, the structure sometimes avoids withholding tax on dividends, which is why a synthetic fund can beat its physical equivalent after tax.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.