iShares Launches the iShares Dow Jones-UBS Roll Select Commodity Index Trust
Offers diversified exposure to commodities while seeking to mitigate the
effects of ‘contango’
SAN FRANCISCO -- August 9, 2013
BlackRock, Inc. (NYSE: BLK) announced today that its iShares Exchange Traded
Funds (ETFs) business, the world’s largest manager of ETFs^1, has launched the
iShares Dow Jones-UBS Roll Select Commodity Index Trust (NYSE Arca: CMDT) on
the NYSE Arca. It is the first exchange traded product based on the Dow
Jones-UBS Roll Select Commodity Index, which currently tracks 22 commodities
futures contracts, including agriculture, energy and metals, and is designed
to minimize the costs of closing expiring futures contracts and replacing them
for new ones.
“Many investors look to commodities to diversify beyond stocks and bonds, but
when investing in commodity funds that typically hold futures contracts, the
buying and selling of contracts can detract from fund performance. By using an
innovative index the iShares Dow Jones-UBS Roll Select Commodity Index Trust
seeks to minimize the costs of changing or ‘rolling’ futures contracts,
enabling the Trust to ultimately provide investors efficient access to
diversified commodities,” said Ravi Goutam, Head of Americas Product for
iShares at BlackRock.
The iShares Dow Jones-UBS Roll Select Commodity Index Trust accesses
commodities exposure through commodity index futures contracts. When the
contracts are close to expiring, the fund replaces the contracts with new
ones. This process is known as “rolling.” If the fund is rolling contracts
for costlier later-dated contracts then the commodity market is in ‘contango’,
which may detract from performance. If the later-dated contracts are less
expensive than the contracts held by the fund, then the commodity market is in
‘backwardation’, which may add to performance.
The Dow Jones-UBS Roll Select Commodity Index, a version of the Dow Jones-UBS
Commodity Index, aims to mitigate the effects of contango on performance. For
each commodity, the index rolls into the futures contract that shows the most
backwardation or least contango, selecting from those contracts with nine
months or fewer until expiration.
The index currently represents 22 commodities futures contracts, which are
weighted to account for economic significance and market liquidity. There are
weighting restrictions on individual commodities and commodity groups to
promote diversification. As of July 31, 2013, the largest sector weightings of
the index included energy (38%), agriculture (34%) and metals (28%).
BlackRock is a leader in investment management, risk management and advisory
services for institutional and retail clients worldwide. At June 30, 2013,
BlackRock’s AUM was $3.857 trillion. BlackRock helps clients meet their goals
and overcome challenges with a range of products that include separate
accounts, mutual funds, iShares^® (exchange-traded funds), and other pooled
investment vehicles. BlackRock also offers risk management, advisory and
enterprise investment system services to a broad base of institutional
investors through BlackRock Solutions^®. Headquartered in New York City, as of
June 30, 2013, the firm has approximately 10,700 employees in 30 countries and
a major presence in key global markets, including North and South America,
Europe, Asia, Australia and the Middle East and Africa. For additional
information, please visit the Company's website at www.blackrock.com.
iShares is a global product leader in exchange traded funds with over 600
funds globally across equities, fixed income and commodities, which trade on
20 exchanges worldwide. The iShares Funds are bought and sold like common
stocks on securities exchanges. The iShares Funds are attractive to many
individual and institutional investors and financial intermediaries because of
their relative low cost, tax efficiency and trading flexibility. Investors can
purchase and sell shares through any brokerage firm, financial advisor, or
online broker, and hold the funds in any type of brokerage account. The
iShares customer base consists of the institutional segment of pension plans
and fund managers, as well as the retail segment of financial advisors and
high net worth individuals.
The iShares Dow Jones-UBS Roll Select Commodity Index Trust is not a standard
ETF. The Trust is not an investment company registered under the Investment
Company Act of 1940. Shares of the Trust are not subject to the same
regulatory requirements as mutual funds. Investments in shares of the Trust
are speculative and involve a high degree of risk. Before making an investment
decision, you should carefully consider the risk factors and other information
included in the prospectus.
This information must be preceded or accompanied by a current prospectus for
the Trust, which can be viewed by clicking here.
The sponsor of the Trust is iShares Delaware Trust Sponsor LLC (the
“Sponsor”). BlackRock Investments, LLC ("BRIL"), assists in the promotion of
the Trust. The Sponsor and BRIL are affiliates of BlackRock, Inc.
The value of the shares of the Trust depends on the value of Index Futures
held by the Trust, which will fluctuate based on the prices of commodity
futures contracts reflected in the DJ-UBS Roll Select Commodity Index. These
prices may be volatile, thereby creating the potential for losses regardless
of the length of time shares of the Trust are held.
Commodity prices are generally affected by, among other factors, the cost of
producing, transporting and storing commodities, changes in consumer or
commercial demand for commodities, the hedging and trading strategies of
producers and consumers of commodities, speculative trading in commodities by
commodity pools and other market participants, disruptions in commodity
supply, weather, political and other global events, global economic factors
and government intervention in or regulation of the commodity or commodity
futures markets. These factors cannot be controlled by the Trust. Accordingly,
the price of shares of the Trust could change substantially and in a rapid and
unpredictable manner. This exposes investors to a potential loss on an
investment in the Trust, regardless of the length of the investment. The Trust
may not provide anticipated benefits of diversification from other asset
Commodity futures trading may be illiquid. In addition, suspensions or
disruptions of market trading in the commodities markets and related futures
markets may adversely affect the value of the Trust. Although market makers
will generally take advantage of differences between the NAV and the trading
price of Trust shares through arbitrage opportunities, there is no guarantee
that they will do so. There is no guarantee an active trading market will
develop for shares of the Trust, which may result in losses on an investment
at the time shares are sold.
The Sponsor has broad discretion to liquidate the Trust at any time. The Trust
could be liquidated at a time when the disposition of its interests will
result in losses to investors. Shares of the Trust are not deposits or other
obligations of or guaranteed by BlackRock, Inc., and its affiliates, and are
not insured by the Federal Deposit Insurance Corporation or any other
The Shares are not sponsored, endorsed, sold or promoted by Dow Jones or UBS
AG or any of their subsidiaries or affiliates. Neither Dow Jones and UBS AG,
nor their affiliates, make any representation regarding the advisability of
investing in the Trust.
© 2013 BlackRock. All rights reserved. iSHARES® and BLACKROCK® are registered
trademarks of BlackRock. All other marks are the property of their respective
* Not FDIC Insured * No Bank Guarantee * May Lose Value
^1 Source: BlackRock ETP Landscape Report, May 31, 2013
Christine Hudacko, 415-670-2687
Melissa Garville, 212-810-5528
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