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HSBC’s S&P CTI Elements ETNs offer long/short commodities exposure

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HSBC USA has announced the launch on NYSE Arca of Elements exchange-traded notes linked to the performance of the S&P Commodity Trends Indicator – Total Return, which applies a long/sh

HSBC USA has announced the launch on NYSE Arca of Elements exchange-traded notes linked to the performance of the S&P Commodity Trends Indicator – Total Return, which applies a long/short approach to the commodities markets.

The S&P Commodity Trends Indicator – Total Return is a diversified composite of 16 physical commodity futures, grouped into six sectors. Each sector is positioned either long or short (except energy, which is always positioned either long or flat), based on its price behaviour relative to its exponential moving average.

This long/short exposure gives the S&P CTI Elements ETNs the ability to benefit from both rising and declining price trends in the commodities markets.

‘We believe that the growth in the commodities sector is one of the key investment themes of our time,’ says Steven Phan, global head of global structured fund products at HSBC. ‘This product improves upon the idea of passive index investing by applying a long/short strategy to the commodities markets.’

Kurt Overley, head of HSBC’s global structured fund products team in New York, adds: ‘The S&P CTI Elements ETN will be an important component of a well-diversified investment portfolio.

‘The S&P CTI comprises a diverse cross-section of commodity futures, and generally commodities exhibit low correlation with traditional equity and fixed-income markets. Just as important in the current markets is the ability of the S&P CTI to set individual commodity sectors long or short in response to rising or declining price trends.’

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