The new UBS Bloomberg CMCI Food Index provides direct exposure to the food sector.It is available in US dollars, euros and Swiss francs and covers 13 commodities, including wheat, corn, soybeans, sugar and livestock. Each commodity is diversified across a range of different investment maturities and uses the same methodology as the UBS Bloomberg Constant Maturity Commodity Index (CMCI), which was launched in January 2007.
“Awareness of the link between commodity prices and inflation has increased significantly over the last six months, due mostly to the rise in food prices. The new index was developed in response to a growing demand from investors looking to hedge against this price inflation as well as from those looking to buy food related commodities for diversification purposes,” said Morgan Metters, head of commodity index structuring at UBS.
The family of UBS Bloomberg CMCI Indexes, including the new food index, will serve as underlyings for a variety of investment products, such as exchange-traded funds (ETFs), structured products and investment funds.
As of 25 February 2008, the commodities with the largest target weights were: wheat, with 21.94%; corn, with 17.33%; and soybeans, with 14.94%.
More on Structured Products
Move follows series of structured products hires at Canadian banks
The pros and cons of obtaining diversification through multiple counterparties
Potential for early kick-out on Russell 2000 and iShares Emerging Markets ETF
Six-year product exploits low correlation between sectors
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.