UBS CMCI Commodity Carry SF UCITS ETF (USD) A-acc
| Issuer: UBS |
| Asset Class: Commodity |
| TER: 34bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 24 Jan 2020 |
| Ticker: CCUA |
| ISIN: IE00BKFB6L02 |
This investment product offers a strategic approach to commodity investing, aiming to capitalize on specific characteristics of the futures market beyond simple price appreciation. It provides exposure to a diversified portfolio of commodities spanning key sectors such as energy, industrial metals, precious metals, agriculture, and livestock. By investing in commodity futures, it allows for broad market participation without the complexities of holding physical goods. The strategy is designed for investors seeking to diversify their portfolios, gain a potential hedge against inflation, and access a return stream that is often uncorrelated with traditional equity and bond markets.
The fund's primary objective is to capture "carry" from commodity markets. Carry is the potential return generated as a futures contract's price converges toward the underlying commodity's spot price over time. When a futures market is in "backwardation" (futures prices are lower than the spot price), it presents an opportunity for positive carry. Conversely, "contango" (futures prices are higher than the spot price) typically results in a negative carry, which can erode returns for long-only investors. This product employs a systematic strategy that seeks to maximize positive carry by actively tilting its portfolio.
The underlying index methodology involves being long those commodity futures that are exhibiting the steepest backwardation and underweighting or being short those that are in the deepest contango. This dynamic allocation aims to generate a consistent return stream from the structural shape of the futures curve itself. Furthermore, the strategy utilizes a constant maturity approach, which helps to mitigate the negative impact of rolling contracts in contango-affected markets. This sophisticated methodology provides a more nuanced way to access the commodity asset class, potentially enhancing returns compared to standard, long-only commodity indices, especially in certain market environments.
