UBS ETF (IE) Bloomberg Commodity CMCI SF UCITS ETF (Hedged to GBP)

Issuer: UBS

Asset Class: Commodity

TER: 34bps

Trading Currency: GBX

Pays Income: False

Listing Date: 06 Mar 2018

Ticker: UD06

ISIN: IE00BF0V4615

This fund offers investors a diversified, broad-based exposure to the global commodities market, serving as a potential hedge against inflation and a tool for portfolio diversification. It aims to track the performance of an index composed of futures contracts on a wide range of commodities, including energy, agriculture, industrial metals, precious metals, and livestock. By investing in a broad basket, the fund mitigates the volatility associated with single commodity investments and provides a more stable representation of the overall asset class. The strategy is particularly notable for its underlying index, which employs a flexible rolling methodology to select contracts along the futures curve. This approach is designed to reduce the negative impact of “contango” and capitalize on “backwardation,” potentially offering better returns compared to standard indices that only roll front-month contracts.

This specific share class is synthetically replicated and structured as an accumulating fund, meaning any income generated is automatically reinvested to enhance long-term compound growth. Furthermore, it incorporates a currency hedge to the British pound. This feature is crucial for UK-based investors, as it aims to neutralize the impact of exchange rate fluctuations between the US dollar, the primary currency for commodity trading, and the pound sterling. Consequently, investors' returns are more directly tied to the performance of the underlying commodities themselves, rather than being influenced by currency market volatility. This makes it a suitable instrument for those seeking pure commodity exposure within their domestic currency framework.