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Investing in commodities is a crucial component to diversifying a portfolio, offering investors a variety of opportunities in crucial sectors such as energy, agricultural products, industrial metals, precious metals and livestock.
In this context, a product emerges as an intriguing financial vehicle, offering exposure to such sectors through synthetic replication of the UBS CMCI Index.
In this in-depth analysis, we will explore the key characteristics of this ETF, from its structure and fund size to its historical performance and associated risks.
We are ready to reveal a comprehensive product overview, providing investors with a solid basis for making informed decisions in the context of the commodity market.
The UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc The UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) is a passively managed fund that offers investors the opportunity to participate in performance of the UBS CMCI index, which tracks commodities from five sectors: energy, agricultural products, industrial metals, precious metals and livestock.
This ETF, with a fund size of approximately €1,164 million, is managed by UBS ETF and is issued in Ireland.
read also A sustainable food ETF to watch in 2024 Structure and Replication The ETF uses a swap-based synthetic replication structure to follow the performance of the underlying index.
This means that, rather than physically owning all the commodities represented in the index, the ETF uses financial contracts (swaps) to replicate their performance.
Synthetic replication may involve some risks, but it is a common practice in many ETFs.
Costs and Risk The total expense ratio (TER) of the ETF is 0.34% per annum, which represents the total cost of managing the fund.
While this level of expense is relatively low, investors should keep this in mind when evaluating the ETF's attractiveness.
It should be noted that currency risk is not hedged, which means that investors will be exposed to fluctuations in foreign currencies.
Return and Volatility The return analysis shows that the ETF has had a variation in returns over the years.
Over the past year, the yield has been -3.50%, while long-term yields, such as 3-year and 5-year yields, have been very positive, with increases of 65.55% and 69% respectively.
However, past returns are not sure indicators of future returns, and investors should take into consideration the ETF's volatility, which was 12.69% over the past year.
read also The podium of new ETF issues in 2023 Market Risk The ETF has fairly limited volatility, especially considering the type of asset it replicates.
However, it is important to note that all investments involve some degree of risk, and past performance may not necessarily reflect the future.
The Maximum Drawdown, which represents the maximum loss recorded by the ETF, has been 48.00% since its launch.
This figure provides an indication of the potential risk to which investors may be exposed.
Listing on various stock exchanges The ETF is listed on various stock exchanges, including the Italian Stock Exchange, the London Stock Exchange, the SIX Swiss Exchange, the Bolsa Mexicana de Valores and the Stuttgart Stock Exchange.
This presence on multiple exchanges gives investors the flexibility to trade the ETF on international platforms.
Conclusions In conclusion, the UBS ETF (IE) CMCI Composite SF UCITS ETF (USD) A-acc is a financial product that offers diversified exposure to commodities through synthetic replication of a well-structured index.
Investors should carefully consider the associated costs, currency risk and volatility, as well as monitor past performance and market trends.
As always, it is advisable to consult a financial advisor before making any investment decisions.
read also How to buy Bitcoin ETF Disclaimer The information and considerations contained in this article must not be used as the sole and main support on which to make investment decisions.
The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon.
The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings.

Author: Hermes A.I.

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