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UBS Global Asset Management – Best Mixed ETF Manager

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UBS Global Asset Management’s ETF business has grown steadily in recent years to become Europe’s 4th largest ETF provider. Although UBS has been in the ETF space for 12 years, it has only been operating in the UK for less than two years – indeed, in 2012 the listing of 66 ETFs on the London Stock Exchange was the largest ever by an ETF provider.

“Over the last year, we have seen our AuM in Europe grow by over GBP3.0bn. At the beginning of 2013, we had AUM of c. GBP7.4bn. We are now at GBP10.6bn,” confirms Andrew Walsh (pictured), Head of UBS ETF Sales, UK.
 
In total, UBS ETFs offers investors access to 119 different indices. Some of the more innovative developments at UBS recently were within the currency-hedged space.
 
“Currency-hedged ETFs have proved popular with our clients since their launch. In the UK, we launched four currency-hedged products in November 2013 and then another two in January. All of them are tracking MSCI GBP-hedged indices; Japan, US, EMU, Australia, Canada and Switzerland,” says Walsh.
 
UBS offers 33 currency-hedged ETF overall, the most in Europe. “Our goal is not to produce “me too” products. The currency-hedged ETFs are a good example of the type of innovation we are trying to bring to the marketplace,” says Walsh.
 
Commodities are another important asset class where UBS has been able to bring innovation and exposure to alternative indices.
 
This is best illustrated by the UBS CMCI Composite ETF, which tracks a second-generation commodities index that helps to reduce the effects of negative roll yield. UBS is the only firm to offer an ETF that gives investors exposure to the Constant Maturity Commodities Index, which tracks 26 commodities.
 
“The index in exposed to five different points in the futures curve and constantly rolls each of the 26 different commodity contracts,” says Walsh. “This helps to mitigate the problems faced by first-generation commodity indices where everyone is trying to roll the futures contracts at the same time. This ‘congestion’ in the front-month futures contract can tend to result in exacerbated levels of contango (where the forward futures contract delivery price is higher than the spot price).”
 
Instead of just being exposed to 3-month futures across these different commodities, the CMCI index also uses 6-month, 1-year, 2-year and 3-year futures to generate better performance with lower levels of volatility.
 
The CMCI Composite has outperformed the S&P GSCI broad commodities index by 32.1% per since 2007.
 
Last September, UBS introduced a major price reduction across their class A ETFs. Previously, UBS offered two share classes (‘A’ & ‘I’) whereby the class I ETFs had larger single unit sizes but lower TERs than their corresponding class A ETFs.
 
With the 30 per cent price reduction, the pricing of the two classes was harmonised to the same low level, enabling UBS to offer some of the lowest TERs in the European ETF space.
 
“We are committed to offering solutions to investors which not only provide easy access to attractive investment opportunities, but do so at very attractive prices,” says Walsh who, on UBS GAM winning this year’s award, comments: “We are very pleased to have been recognised by etfexpress with this award which I believe reflects the quality and breadth of our ETF offering.” 

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