The change involves index names, and should have little to no impact for ETF investors.
Bloomberg is taking over the management of a lineup of UBS commodities indexes this summer, though the transaction isn’t likely to make much difference to ETF investors. That said, the partnership could impact the commodities indexing segment over time, as Bloomberg uses its considerable marketing muscle to expand use among institutional and retail investors. Terms weren’t disclosed.
There are today roughly 150 commodity exchange-traded products with $67.6 billion in combined assets—145 of them passively managed. About 20 percent of them are linked to one of the Dow Jones-UBS benchmarks, according to our data.
Under terms of the deal, the indexes will be renamed from the “Dow Jones-UBS Commodity Index Family” to the “Bloomberg Commodity Index Family” as of July 1, an executive at Bloomberg Indexes told ETF.com.
Among the existing strategies that will undergo name changes:
- $1.6 billion iPath Dow Jones-UBS Commodity Total Return ETN (DJP | A-22). Barclays has a total of 19 ETNs that are linked to the Dow Jones-UBS benchmarks.
- UBS is behind strategies such as the Etracs DJ-UBS Commodity Total Return ETN (DJCI | B-30) that will undergo name changes.
- ProShares and iShares market strategies that use Dow Jones-UBS indexes, and their products are likely to face name changes this summer as well.
“The only meaningful change will be the names of these benchmarks,” Srikant Dash, head of Bloomberg Indexes, told ETF.com. “The methodology, the rebalancing frequency, the costs, all of these other characteristics should remain the same.”
Expansion Of Commodities Indexing
Bloomberg is hoping to invest heavily in investor education on all aspects of commodity investing, including index construction, and on the diversification benefits commodities bring to a portfolio, Dash says.
Beyond that, he argues that Bloomberg will bring independence of governance and management to the index calculations and administration, taking away the day-to-day work from the hands of a financial institution. That independence, he says, is a positive change for investors.
“We are combining our deep data sets with independence of benchmark governance,” he noted. “The feedback has been great.”
The partnership expands Bloomberg and UBS’ indexing collaboration, the companies say.
The two companies created the UBS Bloomberg Constant Maturity Commodity Index (CMCI) back in 2007, an index family that provides diversified commodity exposure across the full spectrum of the futures curve, the company notes in a press release.
