ETRACS UBS Bloomberg Constant Maturity Commodity Index (CMCI) Total Return ETN Series B due April 5, 2038
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ETRACS UBS Bloomberg Constant Maturity Commodity Index (CMCI) Total Return ETN Series B due April 5, 2038 (UCIB) is an exchange-traded note rather than a company. It consists of senior unsecured debt securities issued by UBS, with a stated maturity date of April 5, 2038. The note is best known for offering exposure to a broad basket of commodities through a single listed security tied to a commodity index.
The note tracks an index built to serve as a diversified benchmark for commodities as an asset class. That index is made up of futures contracts covering 27 components, which represent 24 separate commodities, with as many as five different maturity dates for each individual commodity. Spreading exposure across multiple commodities and multiple contract maturities is intended to give the benchmark a broad and balanced profile rather than concentrating it in a single raw material or delivery date.
The return on the index comes from two parts. The first is the uncollateralized return on the futures contracts that make up the index, which reflects price movements in the underlying commodity positions. The second is a daily fixed-income return. Because UCIB is a debt instrument issued by UBS, its payments depend on the performance of the index and on the issuer standing behind the note. Holders of the security are exposed both to changes in the commodity index and to the credit of UBS as the party obligated to pay amounts due under the note over its term to the 2038 maturity.