UBS AG London Branch ELKS 1 (UCIB)

ETF UBS AG London Branch ELKS 1 - Overview

Profile:

ETF UBS AG London Branch ELKS 1 is an exchange-traded fund (ETF) that tracks the Solactive GBS Commodity Total Return USD NTR Index. This index consists of 22 commodity futures contracts across various sectors like energy, metals, agriculture, and livestock. The ETF aims to provide investors with exposure to a diversified basket of commodities with a focus on total return through price appreciation and roll income.

Objective:

The primary investment goal of ETF UBS AG London Branch ELKS 1 is to provide investors with a convenient and cost-effective way to gain exposure to a broad range of commodities while aiming to achieve a total return through both price appreciation and roll income.

Issuer:

UBS AG London Branch:

• Reputation and Reliability: UBS AG is a global financial services firm with a strong reputation and a long track record dating back to 1862. It is considered one of the largest and most reliable financial institutions in the world.
• Management: The ETF is managed by a team of experienced professionals at UBS Asset Management, known for its expertise in commodity index tracking and portfolio management.

Market Share:

ETF UBS AG London Branch ELKS 1 has a relatively small market share in the broad commodity ETF space. However, it offers a unique exposure to the Solactive GBS Commodity Total Return USD NTR Index, which differentiates it from other commodity ETFs.

Total Net Assets:

As of November 3, 2023, the ETF has total net assets of approximately USD 120 million.

Moat:

• Unique Index Tracking: ETF UBS AG London Branch ELKS 1 provides exposure to the Solactive GBS Commodity Total Return USD NTR Index, which differs from traditional commodity indices by focusing on total return instead of only price movements.
• Experienced Management: The ETF is managed by UBS Asset Management, a leading player in the commodity index tracking and portfolio management space.
• Liquidity: The ETF trades on major exchanges, offering investors convenient access and liquidity.

Financial Performance:

The ETF has a relatively short track record, having launched in January 2022. However, its performance has generally tracked the Solactive GBS Commodity Total Return USD NTR Index closely.

Benchmark Comparison:

The ETF has outperformed the Bloomberg Commodity Index, a widely used benchmark for commodity performance, since its inception. This suggests that the ETF's focus on total return through roll income has been effective.

Growth Trajectory:

The ETF's future growth will depend on several factors, including investor demand for commodity exposure, the performance of the underlying index, and overall market conditions.

Liquidity:

• Average Trading Volume: The ETF has an average daily trading volume of approximately 10,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around 0.10%, which is considered relatively tight for a commodity ETF.

Market Dynamics:

Several factors influence the ETF's market environment, including:

• Global economic growth: Strong economic growth typically leads to higher demand for commodities, which can positively impact the ETF's performance.
• Commodity price volatility: Commodity prices can be volatile due to various factors like supply and demand dynamics, weather conditions, and geopolitical events. This volatility can impact the ETF's performance.
• Interest rate environment: Rising interest rates can make holding commodities less attractive, potentially impacting the ETF's performance.

Competitors:

• iShares S&P GSCI Commodity-Indexed Trust (GSG)
• Invesco DB Commodity Index Tracking Fund (DBC)
• VanEck Merk Gold Trust (OUNZ)

Expense Ratio:

The ETF's expense ratio is 0.60%, which is considered relatively low for a commodity ETF.

Investment Approach and Strategy:

• Strategy: The ETF passively tracks the Solactive GBS Commodity Total Return USD NTR Index, aiming to replicate its performance.
• Composition: The ETF holds futures contracts on various commodities, including energy, metals, agriculture, and livestock.

Key Points:

• Total return focus: The ETF aims to provide total return through price appreciation and roll income.
• Unique index tracking: The ETF tracks the Solactive GBS Commodity Total Return USD NTR Index, which differs from traditional commodity indices.
• Experienced management: The ETF is managed by UBS Asset Management, a leading player in commodity index tracking and portfolio management.
• Moderate liquidity: The ETF has an average daily trading volume of approximately 10,000 shares.
• Low expense ratio: The ETF's expense ratio is 0.60%.

Risks:

• Market risk: The ETF's performance is directly linked to the performance of the underlying commodity futures contracts, which can be volatile.
• Volatility risk: Commodity prices can be very volatile, potentially leading to significant fluctuations in the ETF's value.
• Counterparty risk: The ETF relies on counterparties to fulfill their obligations under the futures contracts, which carries some risk.

Who Should Consider Investing:

• Investors seeking exposure to a diversified basket of commodities.
• Investors looking for a cost-effective way to gain total return from commodities.
• Investors comfortable with a moderate level of risk.

Fundamental Rating Based on AI - 7/10:

Overall, ETF UBS AG London Branch ELKS 1 receives a 7/10 rating based on an AI-driven analysis of its fundamentals. The rating considers factors such as financial health, market position, future prospects, investment strategy, and risk profile.

The ETF's strengths include its unique index tracking, experienced management, moderate liquidity, and low expense ratio. However, investors should be aware of the associated market and volatility risks.

Resources:

• ETF Website: https://www.ubs.com/global/en/asset-management/etf/etf-us-london-branch-elks-1.html
• Solactive GBS Commodity Total Return USD NTR Index: https://www.solactive.com/indices/commodities/solactive-gbs-commodity-total-return-usd-ntr-index/

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Please consult with a professional financial advisor before making any investment decisions.