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For over two decades the Auspice team has pioneered innovative commodity solutions. Today we’re proud to share the launch of Auspice Commodity Evolution (ACE) – an ESG-aligned tactical commodity strategy that opportunistically trades commodity evolution and energy transition markets.
ACE is a next step in the evolution of Auspice – a strategy designed to provide targeted, ESG-aligned inflation protection with transparency, reliability, and capital efficiency. ACE was developed in partnership with the Concordia University Inter-Generational Fund (CUiF), a UN-PRI signatory and leader in Responsible Investing, and the Pension Plan for the Employees of Concordia University (PPECU). Built on the proven foundation of our largest strategy, Auspice Broad Commodity (ABC)[1], ACE is the first of its kind in the energy transition category – historically dominated by illiquid private investments in real asset portfolios.
A Proven Foundation: Auspice Broad Commodity (ABC)
Since 2010 inception, Auspice Broad Commodity (the underlying index, that is managed by Auspice, to the NYSE-listed COM (ticker) ETF, the TSX-listed CCOM (ticker) ETF, and institutional managed accounts) has delivered category-leading performance with significantly lower volatility and drawdowns than the Bloomberg Commodity (BCOM) and the S&P GSCI Commodities benchmarks. The rules-based, long/flat trend-following approach has consistently outperformed by capturing upside in trending markets while sidestepping much of the drawdown.
Table 1: Performance of Auspice Broad Commodity Total Return (ABCTRI) vs Benchmarks:
*The performance of Auspice Broad Commodity Index prior to 9/30/2010 represents index data simulated prior to third party publishing as calculated by the NYSE from 1/1/2000. Source: Bloomberg and Auspice Investment Operations, as at May 31st, 2025. You cannot invest directly in an index
ACE: Designed for Capital Efficiency, Sustainability, and Results
Based on the foundation of ABC, ACE is a rules-based, long/flat strategy that concentrates exposure in markets core to the energy transition. Portfolio attributes include:
Inflation-sensitive: ACE focuses on commodities like copper, lithium, aluminum, uranium, and natural gas – markets with structural supply constraints and demand tailwinds linked to electrification, renewable energy, and global infrastructure investment.
Responsibly aligned: The design reflects the decarbonization and responsible investing priorities of our institutional partners. It avoids direct fossil fuel exposure while targeting real assets enabling the low-carbon transition.
Capital-efficient: Auspice average margin-to-equity ratios historically have been below 7% – ACE can be deployed alongside illiquid private market assets in real asset portfolios, adding liquidity and tactical flexibility without requiring significant capital outlay.
ACE is currently being launched with a focus on institutional SMAs, with future access opportunities to be considered as the strategy scales.
Long/Flat: Purpose-Built for Inflation Protection
Both Auspice Broad Commodity and Auspice Commodity Evolution are designed for reliability, transparency, and low implementation complexity – key attributes that enable consistency of execution while avoiding model overfitting and complexity bias.
This is especially important in a commodity landscape where dislocations can be sharp and sudden. Unlike traditional long/short CTA or managed futures programs that typically have “crisis alpha” as a core objective, our approach in ABC and ACE is intentionally constrained:
We are long a commodity only when it demonstrates sustained strength, and
We move to flat – not short – when trend signals are absent or negative.
This simplicity is deliberate. It makes the strategy:
More reliable – “commodities with airbags” is how one of our institutional investors describes our long/flat approach. Many investors are attracted to the commodity upside, but struggle with the downside. The simplified approach in ABC and ACE provides for reliable upside exposure with disciplined risk management.
More robust - the strategy avoids the risk of whipsaws or model-driven overtrading that at times can drag on returns. Alpha is often good, and “crisis alpha” in particular is highly accretive to portfolios. But if you have a bullish commodities outlook, more complex models (RV, mean reversion, carry, etc) can limit that exposure.
More aligned - institutions seeking inflation protection are typically not looking to profit from shorting real assets – they want exposure to real asset appreciation with a high beta to inflation.
Additionally, this approach:
Keeps correlation to equities lower versus commodity benchmarks
Minimizes trading costs, slippage, and expenses (including lower management fees and no performance fees), and
Allows for high capital efficiency – fewer positions than passive indexes with built in risk management provides for lower margin requirements.
In short, both ABC and ACE are purpose-built for investors looking for transparent, risk-managed, liquid real asset exposure that complements core portfolios.
Why Now?
We believe the timing of the launch to be opportunistic. There are multiple drivers supporting a commodity supercycle, with many transition markets particularly susceptible to large price dislocations:
1. Concentration of Critical Mineral Supply
The global supply of critical minerals essential for clean energy technologies is becoming increasingly concentrated. In 2024, the top three producers accounted for 86% of the market share for key materials like copper, lithium, cobalt, graphite, and rare earth elements, up from 82% in 2020[2]. This concentration poses significant price risks – recent price dislocations in cocoa, coffee, and orange juice provide evidence of increasing supply concentration and associated price risk (and opportunity) in commodities.
2. Explosive Growth in AI Driving Energy and Infrastructure Demand
In the United States, data centers are anticipated to account for nearly half of the growth in electricity demand between now and 2030[3]. The energy required for processing data is set to surpass that of all energy-intensive manufacturing sectors combined, including aluminum, steel, cement, and chemicals.[4]
According to the International Energy Agency (IEA), electricity demand from data centers, cryptocurrencies, and AI could double by 2026[5]. This surge adds further strain to already tight supply chains for energy transition materials.
3. Geopolitical Tensions and Supply Chain Vulnerabilities
Rising geopolitical instability continues to strain global commodity markets. From Russia’s invasion of Ukraine, to renewed U.S.–China trade frictions alongside broad based Trump tariffs, supply chains for commodities are becoming increasingly fragile. These vulnerabilities come at a time when global commodity supply is already in a structural deficit.
4. Structural Underinvestment and Supply Constraints
Over the past decade, underinvestment in commodity infrastructure has led to significant supply constraints. Consider copper – the IEA warns that global copper supply could fall 30% short of demand by 2035 if corrective actions aren't taken[6]. Many commodity markets are facing similar challenges.
Looking forward
These tailwinds offer long-term support for transition commodities – but with volatility that demands a disciplined, tactical approach. Refer to Table 2 (next page) for an illustration of where Lithium (symbol “Li”), as an example, has been the best or worst-performing commodity in seven of the last ten years, with significant volatility and severe drawdowns.
Table 2: Periodic Table of Commodity Returns:
Source: https://www.usfunds.com/resource/periodic-table-of-commodities-returns-2024/
Timing is notoriously difficult, which is why ACE applies a rules-based process that participates in trends and protects capital when momentum fades.
Auspice provides robust alternatives to traditional solutions with Auspice Broad Commodity and Auspice Commodity Evolution – focused, rules-based solutions with:
Tactical exposure to commodity markets aligned with investor goals,
Structural alpha given the high capital efficiency,
Transparency and flexibility to adapt to client-specific ESG and communication needs, and
Proven risk management in an asset class that has few long-term managers.
To learn more about Auspice Broad Commodity or Auspice Commodity Evolution, email us today at info@auspicecapital.com.
[1] For more information on ABC: https://www.auspicecapital.com/auspice-broad-commodity
[2] https://apnews.com/article/critical-minerals-supply-world-report-3dbee35f17823656b75939305bbd0512
[3] https://www.iea.org/reports/energy-and-ai/executive-summary
[4] https://www.iea.org/news/ai-is-set-to-drive-surging-electricity-demand-from-data-centres-while-offering-the-potential-to-transform-how-the-energy-sector-works
[5] https://www.iea.org/reports/energy-and-ai/executive-summary
[6] https://www.theguardian.com/environment/2025/may/21/copper-supply-demand-analysis-international-energy-agency
DEFINITIONS
Indices
Indices and benchmarks are used for comparison purposes only or to illustrate comparisons against other widely used indices or benchmarks most commonly referenced by investors. Index statistics/data are sourced from Bloomberg. You cannot invest directly in an index.
· Auspice Broad Commodity is a tactical long strategy that focuses on Momentum and Term Structure to track either long or flat positions in a diversified portfolio of commodity futures which cover the energy, metal, and agricultural sectors. The index incorporates dynamic risk management and contract rolling methods. The index is available in total return (collateralized) and excess return (non-collateralized) versions. Both the NYSE-listed COM (ticker) ETF and the TSX-listed CCOM (ticker) ETFs track the Auspice Broad Commodity Index.
· The Bloomberg Commodity Index Total Return (BCOM TR) Index is a broadly diversified commodity price index that tracks prices of futures contracts on physical commodities on the commodity markets. No one commodity can compose more than 15% of the BCOM ER index, no one commodity and its derived commodities can compose more than 25% of the index, and no sector can represent more than 33% of the index.
· S&P GSCI Total Return Index (GSCI TR) – A production-weighted commodity index covering a broad range of raw materials, including energy (crude oil, natural gas, gasoline, heating oil), metals (gold, silver, aluminum, copper, lead, nickel, zinc), agriculture (wheat, corn, soybeans, cotton, coffee, sugar, cocoa), and livestock (live cattle, feeder cattle, lean hogs). Its weighting heavily favors energy, making it sensitive to crude oil price movements.
· S&P/TSX Composite Index (TSX60) – The benchmark Canadian equity index, representing the largest companies listed on the Toronto Stock Exchange by market capitalization. The TSX Composite provides broad exposure to Canada’s equity markets across sectors including financials, energy, industrials, and materials. The index is float-adjusted and market-cap weighted, and it serves as the primary measure of performance for Canadian equity portfolios.
· MSCI All Country World Index (MSCI ACWI) – A global equity benchmark that tracks the performance of large- and mid-cap companies across 23 developed markets and 24 emerging markets. Covering approximately 85% of the global investable equity universe, the MSCI ACWI is market-cap weighted and includes over 2,800 constituents. The index is commonly used to represent global equity exposure in diversified portfolios.
IMPORTANT DISCLAIMERS AND NOTES
There is a substantial risk of loss in trading futures and options. Past performance is not necessarily indicative of future results.
Commissions, trailing commissions, management fees and expenses may all be associated with investment funds. Please read the prospectus or applicable offering document before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
These materials are provided for informational and educational purposes and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting and tax. Please consult with your own professional advisor on your particular circumstances.
Futures trading is speculative and is not suitable for all customers. Past results are not necessarily indicative of future results. This document is for information purposes only and should not be construed as an offer, recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice. Auspice Capital Advisors Ltd. (the “Manager” or “Auspice”) makes no representation or warranty relating to any information herein, which is derived from independent sources. No securities regulatory authority has expressed an opinion about the securities offered herein and it is an offence to claim otherwise. Please read the applicable offering documents before investing.
This material may contain forward-looking statements, which were prepared for the purpose of providing general educational background information and may not be appropriate for other purposes. Certain statements in this document are forward- looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, “target”, “seek”, “will” and similar expressions to the extent they relate to an Auspice managed investment fund (the “Fund”), where applicable, and the Manager. Forward- looking statements are not purely historical facts but reflect the current expectations of the Fund, where applicable, and the Manager regarding future results or events. Such forward-looking statements reflect the Fund’s, where applicable, and the Manager’s current, reasonable beliefs and are based on information currently available to them. Forward-looking statements are made with assumptions and involve significant risks and uncertainties. Although the forward-looking statements contained in this document are based upon assumptions that the Fund, where applicable, and the Manager believe to be reasonable, neither the Fund, where applicable, or the Manager can assure investors that actual results will be consistent with these forward-looking statements. There is no guarantee that any forward-looking statement will come to pass. As a result, readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results or events to differ materially from current expectations.
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