UBS launches broad commodity ETFs on Deutsche Börse

Jun 13th, 2017 | By | Category: Commodities

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UBS has unveiled two new commodity index ETFs on Deutsche Börse’s Xetra exchange. The ETFs enable investors to participate in the performance of a diversified commodity basket while one of the funds hedges currency risk between the US dollar and the euro.

UBS launches broad commodity ETFs on Deutsche Börse

The ETFs provide exposure to the energy, agriculture, industrial metals, precious metals and livestock commodities sectors.

The UBS Bloomberg Commodity CMCI UCITS ETF (BCFU) tracks the UBS Bloomberg BCOM Constant Maturity Commodity Index and trades in US dollars.

The UBS Bloomberg Commodity CMCI UCITS (hedged to EUR) ETF (BCFE) tracks the UBS Bloomberg BCOM Constant Maturity Commodity hedged to EUR Index and trades in euros while mitigating the risk of adverse currency movements between the euro and the US dollar.

The broad commodity basket comprises components from the energy (34.2%), agriculture (29.2%), industrial metals (26.8%), precious metals (5.4%) and livestock (4.4%) commodities sectors.  The largest commodity exposures are to Brent crude (10.0%), light crude (9.2%), copper (9.1%), aluminium (6.8%) and soybeans (6.4%). (Data as of the end of May 2017)

The indices’ exposures extend beyond short dated contracts and diversifies investment across the futures maturity curve. By providing investors with access to “constant maturities”, UBS states the funds not only give a more continuous exposure to the underlying commodities but also avoids the speculative activity that can surround monthly rolls of traditional indices. It can also minimize exposure to negative roll yield, making the index more representative of the underlying market price movements.

Both ETFs treat income as accumulating and have total expense ratios (TERs) of 0.37%.

ETF Securities and Source also offer broad commodity ETFs which track Bloomberg Indices. The ETFS All Commodities (LON: AIGC) trades in USD and has a total cost of 0.49% while the Source Bloomberg Commodity UCITS ETF (LON: CMOD) also trades in US dollars and has a total cost of 0.40%.

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