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iShares To Add To Swap-Based Range

Written by IU.eu Staff

  
November 14, 2011 11:00 (CET)

iShares plans to launch its first swap-based commodity ETF in the UK early next year, according to a Citywire report.

The iShares S&P GSCI Dynamic Roll Energy Swap ETF will allow investors to gain exposure to oil and gas, sectors which would be more difficult for the issuer to access using its more traditional physical replication method.

iShares launched a swap-based ETF platform in September of last year,  although it said at the time that physical replication would remain its “first option” when launching new products.

The first two funds in the range at launch were the MSCI Russia Capped Index and the S&P CNX Nifty India Index. The rationale for straying from its usual methodology was that in emerging markets, physical replication could lead to greater tracking errors due to a lack of liquidity in the underlying securities.

According to Citywire, the new fund will use swap counterparties to mirror the S&P GSCI Energy Dynamic Roll Capped Commodity index.

 

 


 



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