April 07, 2008 at 10:00 am by Tom Lydon
UBS is getting into the exchange traded game with commodities exchange traded notes (ETNs).
Last week, the firm launched eight ETNs focused on commodities, and the plan is to venture into other asset classes, reports Jesse Emspak for Investor’s Business Daily. The UBS Bloomberg Constant Maturity Commodity Index rolled out last year, and the ETNs will track it. The bank chose to go with notes rather than funds because they’re cheaper to issue and simpler to structure.
The index focuses primarily on energy, followed by industrial metals and agriculture. The latest ETNs focus on metals, agriculture, gold, silver, livestock and food, as well as a broad based set of commodities. The notes will have expense ratios of about 0.65%.
A number of funds offer a commodities play, including these exchange traded funds (ETFs):
- PowerShares DB Agriculture (DBA)
- Market Vectors Global Agribusiness ETF (MOO)
- PowerShares DB Base Metals (DBB)
- iPath Dow Jones AIG Commodity Index (DJP)
- PowerShares DB Commodity Index Fund (DBC)
Tags | Agriculture, DBA, Energy, ETNs, Material ETFs, Metals, Silver
Subscribe to our RSS Feed
April 8th, 2008 at 12:55 am
More Competition in the tracker arena is always good, however buying a note (ETN) instead of a fund (ETF) from a bank with decreased credit quality may lead to results which are not only made by the underlying index but by the news on UBS’s creditworthiness too.