UBS has launched three new exchange traded funds offering exposure to commodities and emerging market bonds. The two EM bond ETFs incorporate a currency hedge.
Andrew Walsh, Head of ETF Sales UK at UBS Global Asset Management.
The UBS ETFs plc – CMCI ex-Agriculture SF UCITS ETF and the UBS ETF (LU) Barclays USD Emerging Markets Sovereign hedged GBP UCITS ETF are listed on the London Stock Exchange today, while the UBS ETF (LU) Barclays USD Emerging Markets Sovereign hedged EUR UCITS ETF is listed on Xetra and in Italy and The Netherlands.
The UBS ETFs plc – CMCI ex-Agriculture SF UCITS ETF offers investors the opportunity to invest in a comprehensive broad commodities index while excluding any investments in soft commodities or livestock, which will appeal to those looking at ESG investments.
It tracks the UBS Bloomberg CMCI Ex-Agriculture Ex-Livestock TR index which is diversified across a broad maturity spectrum. The index is positioned across the entire liquid part of the futures curve, which means it is able to mitigate the effects of negative roll yield and maximize the tracking of the spot commodity prices. Small portions of the underlying futures are rolled daily in order to avoid potential problems associated with the fixed roll dates of traditional indices.
The new commodities ETF is also available with embedded currency hedging to Swiss Francs and Euros. It trades in both sterling and US dollar and has a total expense ratio of 0.37%.
Andrew Walsh, Head of UBS ETFs Sales UK & Ireland, said: “The new commodities ETF tracks a more advanced 2nd generation underlying index and offers investors an opportunity to access broad commodities which excludes those components that are integral parts of the food production chain such as wheat, corn, sugar, cattle et al. In this respect, such a product will also likely appeal to investors who take into account ESG considerations in their investment decision making process.”
The UBS ETF (LU) Barclays USD Emerging Markets Sovereign hedged GBP UCITS ETF and the UBS ETF (LU) Barclays USD Emerging Markets Sovereign hedged EUR UCITS ETF offer investors the opportunity to invest in government and quasi-government bonds from more than 60 emerging market countries with the added benefit of currency-hedging in British Pounds and Euros respectively. The ETFs focuses on both investment-grade and non-investment-grade securities.
The UBS ETF (LU) Barclays USD Emerging Markets Sovereign hedged GBP UCITS ETF and the UBS ETF (LU) Barclays USD Emerging Markets Sovereign hedged EUR UCITS ETF have TERs of 0.47%.
All the ETFs are UCITS IV compliant, have applied for UK Reporting status and are suitable for SIPPs and ISAs.