iPath ETN Lineup To See Dramatic Revamp

January 16, 2018

Market watchers may have noticed that there were some rumblings in Barclays’ lineup of iPath exchange-traded notes over the past year.

The iPath Bloomberg Natural Gas Subindex Total Return ETN (GAZ) was finally delisted after having its creations frozen for nearly a decade with a replacement ETN offered. Also, a pair of the issuer’s largest VIX ETNs are set to see replacements hit the market soon—roughly a year before the corresponding original versions reach maturity.

In retrospect, these things were all warning signs of a major shakeup in the form of two major announcements last week.

Not only is iPath delisting or redeeming a total of 50 of its ETNs, effective April 12, it’s also launching 15 replacements for its original commodity iPath ETNs—a “B Series” that is sort of a new and improved take on what were among the very first ETNs.

16 Commodity ETN Launches

The “Series B” commodity ETNs are essentially one-for-one replacements for the delisting iPath commodity ETNs. The new products, which are set to launch Jan. 18, are listed in the following table:

 

New ETN Name Ticker
iPath Series B Bloomberg Agriculture Subindex Total Return ETN JJAB
iPath Series B Bloomberg Aluminum Subindex Total Return ETN JJUB
iPath Series B Bloomberg Coffee Subindex Total Return ETN BJO
iPath Series B Bloomberg Copper Subindex Total Return ETN JJCB
iPath Series B Bloomberg Cotton Subindex Total Return ETN BALB
iPath Series B Bloomberg Energy Subindex Total Return ETN JJEB
iPath Series B Bloomberg Grains Subindex Total Return ETN JJGB
iPath Series B Bloomberg Industrial Metals Subindex Total Return ETN JJMB
iPath Series B Bloomberg Livestock Subindex Total Return ETN COWB
iPath Series B Bloomberg Nickel Subindex Total Return ETN BJJN
iPath Series B Bloomberg Platinum Subindex Total Return ETN PGMB
iPath Series B Bloomberg Precious Metals Subindex Total Return ETN JJPB
iPath Series B Bloomberg Softs Subindex Total Return ETN JJSB
iPath Series B Bloomberg Sugar Subindex Total Return ETN SGGB
iPath Series B Bloomberg Tin Subindex Total Return ETN JJTB

 

The ETNs they are replacing (which will be delisted by Barclays) are some of the earliest ETNs, and launched nearly a decade ago (see table below). The Series B products have some key differences relative to their original versions.

 

Existing ETN Name Ticker
iPath Bloomberg Agriculture Subindex Total Return ETN JJA
iPath Bloomberg Aluminum Subindex Total Return ETN JJU
iPath Bloomberg Coffee Subindex Total Return ETN JO
iPath Bloomberg Copper Subindex Total Return ETN JJC
iPath Bloomberg Cotton Subindex Total Return ETN BAL
iPath Bloomberg Energy Subindex Total Return ETN JJE
iPath Bloomberg Grains Subindex Total Return ETN JJG
iPath Bloomberg Industrial Metals Subindex Total Return ETN JJM
iPath Bloomberg Livestock Subindex Total Return ETN COW
iPath Bloomberg Nickel Subindex Total Return ETN JJN
iPath Bloomberg Platinum Subindex Total Return ETN PGM
iPath Bloomberg Precious Metals Subindex Total Return ETN JJP
iPath Bloomberg Softs Subindex Total Return ETN JJS
iPath Bloomberg Sugar Subindex Total Return ETN SGG
iPath Bloomberg Tin Subindex Total Return ETN JJT
iPath S&P GSCI Crude Oil Total Return Index ETN OIL

 

Perhaps most importantly for investors, they have significantly lower fees. The new products will come with a daily investor fee of 0.45%—the older set of ETNs all come with an expense ratio of 0.75%. The fee will also be charged differently, using a daily basis based on the closing indicative value of the ETN.

Prior to 2009, there was no accepted standard for how fees were charged. They could be leveled on a daily basis, on a monthly basis or a quarterly basis, etc. Charging the investor fee on a daily basis is more consistent and predictable for investors; it’s also more similar to how ETFs charge their fees, and is in line with how ETNs launched from 2009 onward have calculated their fees.

UBS similarly launched its own "Series B" ETNs in 2015 and 2016. The largest is the ETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B (MLPZ), with $61.5 million in assets under management. It replaced a similarly named ETN that traded under the ticker MLPV and closed down in 2016.

 

 

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