UBS has launched Etracs DJ-UBS Commodity Index 2-4-6 Blended Futures ETN (BLND), the first exchange-traded note linked to an enhanced version of the DJ UBS Commodity Index, the Dow Jones UBS Commodity Index 2-4-6 Forward Blend Total Return index.
The index comprises an equally weighted basket of the two-month, four-month and six-month forward versions of the DJ UBS Commodity Index, providing diverse access to the commodity price curve of each of the 20 commodities currently making up the index. The diverse exposure results in the index limiting concentration at any point on the commodities curve.
"Negative roll yield adversely impacts returns on exchange-traded products based on commodity futures positions," said Christopher Yeagley, managing director and US head of equity structured products. Yeagley also said that investment into the product gives the opportunity to minimise roll risk via its diversified exposure to the index's longer dated futures positions.
The Swiss bank has branched into a number of different sectors aside from commodities using its Etracs ETN series in the past six months while the technology and real estate sectors have also been targeted by the bank. The Etracs Monthly 2xLeveraged ISE Cloud Computing TR Index ETN and the Etracs ISE Solid State Drive Index ETN accessed the technology sector while the Etracs Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN delved into real estate.
All three products offered double participation rates in the respective underlyings.