UBS Global Asset Management has launched a new exchange-traded fund (ETF) on the London Stock Exchange. The fund, the UBS-ETF CMCI Composite, offers diversified exposure to the commodities asset class via a widely diversified and dynamic commodities index.
Based on the UBS Bloomberg Constant Maturity Commodity Index (CMCI) Composite, an index developed by UBS in cooperation with Bloomberg, the fund delivers access to 28 commodity futures contracts covering the energy, industrial metals, precious metals, agriculture and livestock sectors.
As well as offering exposure right across the commodity universe, the index uses up to five constant maturities (futures contracts are rolled on a daily basis to ensure that the average time-to-maturity of the contracts is constant) from three months up to three years. It thus reflects the complete pricing picture and all market opinions, whilst at the same time reducing negative roll returns.
Most conventional commodity indices are typically invested exclusively in short-term futures contracts and therefore consider only a small proportion of the commodity market. In a contango situation, this limited method inevitably leads to negative roll returns.
The individual commodities are weighted in the index according to economic and liquidity data. This weighting reflects the individual commodities’ global consumption patterns. The largest weights are in copper, WTI crude oil, Brent crude oil, aluminium and corn. Energy represents 36.7%, followed by agriculture with 28.4%, industrial metals with 24.8%, precious metals with 6.15 and livestock with 4.1%
The fund is UCITS IV-compliant and available in two share classes: share class “A”, which trades in GBp (British pence) and is aimed at advisers and retail investors, and share class “I” for investors looking to trade in larger volumes in USD.
The fund also maintains listings on the SIX Swiss Exchange, Xetra, Stuttgart Exchange and Borsa Italiana.
LSE listing information:
|UBS ETFs plc – CMCI Composite SF (USD) – A||GBp||0.62%||IE00B53H0131||UC15|
|UBS ETFs plc – CMCI Composite SF (USD) – I||USD||0.45%||IE00B56HZD74||UC16|