UBS Enters ETN Marketplace

April 04, 2008

Notes covering range of commodities, metals and energy hit the market.

 

Swiss-based financial services giant UBS entered the exchange-traded notes market on Friday, launching eight commodities and energy index-based portfolios to join a growing field.

All are listed on the NYSE Arca and marketed as E-TRACS. In terms of the makeup and construction of each new ETN's underlying index, at least in theory, they should provide a more blended approach to commodities investing.

The UBS ETNs trade under the following ticker symbols: CMCI Index (UCI), CMCI Agriculture Index (UAG), CMCI Livestock Index (UBC), CMCI Industrial Metals Index (UBM), CMCI Food Index (FUD), CMCI Energy Index (UBN), CMCI Gold Index (UBZ) and CMCI Silver Index (USV).

"UBS is thrilled to enter the ETN market with the launch of these eight notes," said Kurt Nelson, managing director and head of ETNs at UBS, in a statement.

The ETNs track the performance of the UBS Bloomberg Constant Maturity Commodity Index (CMCI), which UBS says is the first benchmark commodity index to diversify across both commodities and maturities.

"These products offer unique diversification opportunities in a number of commodities, and give accessibility to the UBS Bloomberg CMCI to a broader range of investors," said Nelson.

Basically, the indexes blend exposure over many months rather than buying only one month's contract at a time. That should provide balanced exposure to the commodity, while limiting the impact of contango and backwardation.

UBS E-TRACs are senior unsecured notes issued by UBS AG. The firm has built a site for its new lineup at www.ubs.com/e-tracs.

 

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