UBS rolled into the exchange traded note (ETN) business last month with a line of commodity notes.
The UBS E-TRACS CMCI Total Return (UCI) is designed to track the UBS Bloomberg Constant Maturity Commodity Index Total Return. The index measures the collateralized returns from a basket of 28 commodity futures contracts ranging from three months up to three years.
The subsets are:
- UBS E-TRACS CMCI Agriculture (UAG), 0.65% expense ratio
- UBS E-TRACS CMCI Industrial Metals (UBM), 0.65% expense ratio
- UBS E-TRACS CMCI Livestock (UBC), 0.65% expense ratio
- UBS E-TRACS CMCI Silver (USV), 0.40% expense ratio
- UBS E-TRACS CMCI Gold (UBG), 0.30% expense ratio
- UBS E-TRACS CMCI Food (FUD), 0.65% expense ratio
- UBS E-TRACS CMCI Energy (UBN), 0.65% expense ratio
The futures contracts are diversified across five constant maturities, and they roll on a daily basis, as opposed to monthly. The aim of daily rolling is to stay as close to the spot price as possible instead of getting into a contango mess.
The industrial metals note gives investors exposure to copper, zinc, aluminum, nickel and lead. Energy has exposure to crude oil, gasoline, natural gas and heating oil.
The food note has exposure to live hogs, orange juice and coffee, among other things.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.