Offers diversified exposure to commodities while seeking to
mitigate the effects of ‘contango’
SAN FRANCISCO--(BUSINESS WIRE)--
BlackRock, Inc. (NYSE: BLK) announced today that its iShares Exchange
Traded Funds (ETFs) business, the world’s largest manager of ETFs1,
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%).
About BlackRock
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.
About iShares
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 classes.
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 governmental agency.
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 owners.
iS10463
* Not FDIC Insured * No Bank Guarantee * May Lose Value
1 Source: BlackRock ETP Landscape Report, May 31, 2013
BlackRock, Inc.
Christine Hudacko, 415-670-2687
christine.hudacko@blackrock.com
Melissa
Garville, 212-810-5528
melissa.garville@blackrock.com
Source: BlackRock, Inc.