ETF Securities, a UK exchange-traded funds (ETFs) and currency specialist, has launched the first ETF to track the Dow Jones-UBS Commodity Three-Month Forward (DJ-UBSCI-F3(SM)) Index, following growing investor demand for diversified commodity related products.

"As commodities investing has become more popular and diversified in the past years, market participants increasingly seek innovative indexing tools," said Michael Petronella, president at Dow Jones Indexes.

The ETFX DJ-UBS All Commodities Forward Three-Month Fund allows investors to gain direct exposure to a diversified basket of 19 forward commodity futures prices represented in the DJ-UBSCI-F3(SM) Index. The commodity exposure has a unique two-thirds weighting to liquidity and one-third to production.

The fund will be placed on the newly created ETF Exchange, which is formed by a consortium of investment banks: Bank of America-Merrill Lynch, Barclays Capital, Citi and Rabobank.

This month, ratings agency and financial research company Standard & Poor's (S&P) revealed it will be rolling out two commodity-related sub-indexes that focus only on European and Asian contracts in response to fears the US Commodity Futures Trading Commission will make further changes to existing regulations this year.

Michael McGlone, senior director of commodities at S&P, estimates investment in commodity indexes could reach $60 billion this year, but fears about restrictive US regulation could put people off investing in US contracts.

"The fear of regulation changes has been a driving force for investors seeking return from alternative platforms such as indexes," said McGlone. "Indexes provide a more diversified and long-term exposure to the markets, which tend to provide better returns in the long term."