UBS Asset Management has launched a commodity ETF that takes a short and long position on two different commodity indices.
The UBS ETF CMCI Commodity Carry SF UCITS ETF (UEQC) is listed on Boerse Frankfurt with an expense ratio of 0.34%. UEQC is expected to list on the London Stock Exchange and Six Swiss Exchange.
UEQC takes a short and long position in two indices that contain the same commodities but with different future maturities. The purpose of this is to maximise the roll returns.
Carry trades in this instance is where fair value differences are exploited. The index uses a 2.5x leverage effect.
In November, UBS closed a multi-factor ETF 16 months after launching as a result of low-level demand in the product.