UBS adds MSCI Australia and MSCI USA trackers to sterling-hedged ETF lineup

Jan 9th, 2014 | By | Category: Equities

UBS Global Asset Management has announced the listing of four new GBP-hedged exchange-traded funds (ETFs) on the London Stock Exchange.

UBS adds MSCI Australia and MSCI USA trackers to sterling-hedged ETF lineup

UBS has added MSCI Australia and MSCI USA trackers to its lineup of London-listed sterling-hedged ETFs.

The ETFs track the MSCI Australia and MSCI USA indices and are available in both distributing and accumulating share classes. They are the first of their kind to be listed on the LSE.

These products are complemented through additional listings of un-hedged share classes on the S&P 500 and the MSCI USA.

The new currency-hedged additions build on UBS’s existing GBP-hedged ETF lineup, which allows investors to gain exposure to a range of international markets whilst mitigating their currency risks against the British pound.

Investors now have a total of 12 GBP-hedged UBS-sponsored ETFs from which to choose, including funds tracking the following parent MSCI indices: MSCI Australia, MSCI Canada, MSCI EMU, MSCI Japan, MSCI Switzerland, and MSCI USA.

All of the funds are UCITS compliant, LSE-listed, SIPP and ISA eligible and will apply for UK Reporting Fund status and perform annual reporting for UK investors. The ETFs hedge foreign currency exposure by selling each foreign currency forward at the one-month forward rate.

Andrew Walsh, Head of UBS ETF UK & Ireland, explained: “Portfolios which include global equities are exposed to several currency risks. Exchange rate fluctuations can have a major impact on investment returns. Canada provides a good example of how important currency hedging can be. The MSCI Canada has posted an annualized return of 8.34% in local currency terms. Without hedging, British Pound investors would have earned only 1.01%, while with currency hedging in place, the gain could have been 8.12%.”

The new GBP-hedged ETFs are as follows (fund name, ticker, trading currency, total expense ratio):

UBS ETF (IE) MSCI Australia hedged GBP UCITS ETF A-dis (UC71) GBp 0.50%
UBS ETF (IE) MSCI Australia hedged GBP UCITS ETF A-acc (UC72) GBp 0.50%
UBS ETF (IE) MSCI USA hedged GBP UCITS ETF A-dis (UC73) GBp 0.30%
UBS ETF (IE) MSCI USA hedged GBP UCITS ETF A-acc (UC74) GBp 0.30%

In addition, UBS has listed a distributing share class on the S&P 500 as well as on the MSCI USA, with the trading currency in US dollars:

UBS ETF (IE) MSCI USA UCITS ETF A-dis (UC03) USD 0.20%
UBS ETF (IE) S&P 500 UCITS ETF A-dis (UC12) USD 0.20%

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