WisdomTree Enhanced Commodity Carry - EUR Daily Hedged
WisdomTree Enhanced Commodity Carry - EUR Daily Hedged is a fully collateralised, UCITS eligible Exchange Traded Commodity (ETC) designed to provide investors with a total return exposure to Commodity futures contracts currency hedged in EUR. The ETC aims to replicate the BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index (BNPIF73E) by tracking the BNP Paribas Enhanced Commodity Carry EUR Hedged Excess Return Index and providing the interest revenue adjusted to reflect fees and costs associated with the product. For example, if the BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index rises by 1% over a day, then the ETC will rise by 1%, excluding fees. However if the BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index falls by 1% over a day, then the ETC will fall by 1%, excluding fees.
The BNP Paribas Enhanced Commodity Carry Excess Return Index provides an exposure to the difference in performance of two underlying commodity indices seeking to generate positive returns that are independent of the commodity market environment. Its objective is therefore not to directly track movements in commodity markets. The BNP Paribas Enhanced Commodity Carry Excess Return Index also utilises leverage, meaning that its value may rise or fall more than the difference in performance of the two commodity indices to which it has exposure.
Why Invest?
- Gain exposure to a leveraged premium (also known as the commodity carry factor) from the difference in the carry costs between the long and short positions in futures contracts of the same set of underlying commodities
- UCITS eligible and fully collateralised.
- Transparent performance and fees.
- Easy to invest: rules based exposure to the carry factor without the need to manage commodity futures
- Risk Management: You cannot lose more than the amount invested.
- Liquidity: Trades on exchange, with multiple authorised participants (APs) and market makers (MMs).
- Currency risk is hedged on a daily basis, minimizing the EUR/USD exchange rate risk.
Potential Risks
- An investment in an ETP involves a degree of risk. Any decision to invest should be based on the information contained in the relevant prospectus. Prospective investors should obtain independent accounting, tax and legal advice and should consult their professional advisers to ascertain the suitability of this ETP as an investment to their own circumstances.
- This ETP is structured as a debt security and not as shares (equity) and can be created and redeemed on demand by authorised participants and traded on exchange just like shares in a company. This ETP is not a UCITS product.
- Investing in ETPs that incorporate leverage is only suitable for sophisticated and or informed investors who understand leverage, impact of rebalancing and compounded returns and are willing to magnify potential losses. Any investment in a short or leveraged ETP should be monitored regularly to ensure consistency with your investment strategy. In extreme volatility, returns of leveraged ETPs may under-perform expected returns because of protection mechanisms within the ETP structure, intended to protect against market crashes between rebalance.
- Market Risk: The value of securities in this ETP is directly affected by increases and decreases in the value of the Index. Accordingly, the value of a security may go up or down and a security holder may lose some or all of the amount invested but can not lose more than the amount invested.
- Liquidity risk: There can be no certainty that securities can always be bought or sold on a stock exchange or that the market price at which the securities may be traded on a stock exchange will always accurately reflect the performance of the Index.
- The currency hedge is reset on a daily basis, which means that investors will be exposed to intra-day movements in the exchange rate.
- Counterparty risk: The Issuer is reliant on there being swap counterparties available to enter into swap agreements on a continuing basis and, if no swap counterparties are willing to do so, the ETP will not be able to achieve its investment policy of tracking the performance of the Index.
- Credit Risk: The Issuer is subject to the risk that third party service providers may fail to return property or collateral belonging to the Issuer or pay money due to the Issuer. The ETP is backed by swaps. The payment obligations of the swap counterparties to the Issuer are protected by collateral held which is marked to market daily. The collateral is held in segregated accounts at The Bank of New York Mellon. In the event a swap counterparty defaults, the proceeds from realisation of the collateral may be less than what the investor expects. Details of the collateral held can be found in the Collateral section of the WisdomTree website (www.wisdomtree.com).
- The performance of commodity indices may differ significantly from spot commodity prices, which are often quoted in the financial press, as the spot in itself is not investable. An investment in commodities may experience high volatility and should be considered as a longer term investment.
- Long and short exposure: The Index includes long and short exposure to certain commodities futures which means that the Index value might decrease even if the underlying commodity futures prices increase
- Please see the risks factors section of the Prospectus for a more detailed discussion of the potential risks.
Overview
| Product Overview | |
|---|---|
| Base/Trading Currency | EUR/EUR |
| Bloomberg Ticker | CRRE GY |
| Index Bloomberg Ticker | BNPIF73E |
| Index Name | BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index |
| ISIN | XS3246967098 |
| Leverage Factor | N/A |
| Structure | |
|---|---|
| Physical Assets | Yes (Collateral) |
| Structure | ETC |
| Domicile | Ireland |
| Replication Method | Fully Collateralised Swap |
| Legal form | Debt security |
| Further Legal and Tax Information | |
|---|---|
| ISA | Eligible |
| SIPP | Eligible |
| UCITS Eligible | Eligible |
| UK Fund Reporting Status | Yes |
| Key Service Providers | |
|---|---|
| Issuers | WisdomTree Multi Asset Issuer PLC |
| Administrator | Apex IFS Limited |
| Custodian | Bank of New York Mellon |
| Trustee | Law Debenture Trust |
| Auditor | Deloitte LLP |
| Swap Provider | BNP Paribas Arbitrage SNC |
| Market Makers | Market Makers |
| Authorised Participants | APs |
| Fees | |
|---|---|
| Annual Management Fee Rate | 0.34% |
| Annual Swap Rate | 0.40% |
Austria
Belgium
Denmark
Finland
France
Germany
Ireland
Italy
Luxembourg
Netherlands
Norway
Poland
Spain
Sweden
United Kingdom
Listings & Codes
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Index Details
The Index is designed as “absolute return indices”, which are indices that generally seek to generate positive returns that are independent of the market environment for a particular asset class. By establishing offsetting short and long positions in futures contracts of the same set of underlying commodities, the targeted exposure aims to be commodities market-neutral except for the maturity profile of the long positions compared to the short positions which is expected to generate positive performance.
To maintain an “absolute return” profile, the Index resets its long and short exposures to 300% and -300%, respectively, on a monthly basis.
During the period between two monthly rebalancing dates, the effective exposures of the long and short legs may not equal 300% and -300% due to the differences in their returns.
The maturity of the exposures and frequency of rolling the exposures differs between the long position and the short position.
More information on the above Index and its total return and hedged versions, including details of the index calculation and construction methodology appear in the index handbook which can be found at: https://indx.bnpparibas.com/
| Index Details | |
|---|---|
| Index Name | BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index |
| Currency | EUR |
| Index Provider | BNP Paribas |
| Bloomberg Ticker | BNPIF73E |
| Leverage Factor | N/A |
| Documents and Links |
|---|
|
BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index Homepage |
Collateral Details
| Collateral Details | |
|---|---|
| Collateral Coverage Ratio | 105.0% |
| Collateralised | Yes |
| Over Collateralised | Yes |
| Custodian | Bank of New York Mellon |
Collateral Structure
Documents
Historical Data
WisdomTree Multi Asset Issuer PLC (the “Issuer”) issues products under a Prospectus (“WTMA Prospectus”) approved by the Central Bank of Ireland, drawn up in accordance with the Directive 2003/71/EC. The WTMA Prospectus has been passported to various European jurisdictions including the UK, Italy and Germany and is available on this document.
WisdomTree Multi Asset Issuer PLC Exchange Traded Products (“ETPs”) are suitable for financially sophisticated investors who wish to take a view on the underlying indices and can understand the risks of investing in products offering leveraged or short exposures.
ETPs offering daily leveraged or daily short exposures (“Leveraged ETPs”) are products which feature specific risks that prospective investors should understand before investing in them. Higher volatility of the underlying indices and holding periods longer than a day may have an adverse impact on the performance of Leveraged ETPs. As such, Leveraged ETPs are intended for financially sophisticated investors who wish to take a short-term view on the underlying indices and understand such risks. As a consequence, WisdomTree is not promoting or marketing WisdomTree Multi Asset Issuer PLC ETPs to retail clients. Investors should refer to the section entitled "Risk Factors" and “Economic Overview of the ETP Securities” in the WTMA Prospectus for further details of these and other risks associated with an investment in Leveraged ETPs and consult their financial advisors as needed. Neither WisdomTree, nor the Issuer has assessed the suitability of any Leveraged ETPs for investors other than the relevant Authorised Participants.
While many leveraged WisdomTree Multi Asset Issuer PLC ETPs reset the leverage or short exposure on a daily basis, certain WisdomTree Multi Asset Issuer PLC ETPs utilise leverage in longer term strategies, where leveraged exposures may be reset monthly. These products are also only suitable for financially sophisticated investors who have understood the specific risks within the prospectus of the relevant product.
The BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index is the exclusive property of BNP Paribas (“BNPP”). The BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index is used by WisdomTree under licence. The Index-linked Securities are not endorsed or approved in any way by BNPP. BNPP do not make any warranties whatsoever in relation to use of the BNP Paribas Enhanced Commodity Carry EUR Hedged Total Return Index and are not liable for any losses caused by the use thereof.
The methodology of and rules governing the index (the "Index Methodology" and the "Index") are proprietary. None of the sponsor of the Index (the "Index Sponsor"), the index calculation agent (where such party is not also the Index Sponsor, the "Index Calculation Agent") nor, where applicable, the index Investment Advisor (the "Index Investment Advisor") guarantee that there will be no errors or omissions in computing or disseminating the Index.
The Index Methodology is based on certain assumptions, certain pricing models and calculation methods adopted by the Index Sponsor, the Index Calculation Agent and, where applicable, the Index Investment Advisor, and may have certain inherent limitations. Information prepared on the basis of different models, calculation methods or assumptions may yield different results. You have no authority to use or reproduce the Index Methodology in any way, and neither BNP Paribas nor any of its affiliates shall be liable for any loss whatsoever, whether arising directly or indirectly from the use of the Index or Index Methodology or otherwise in connection therewith.
The Index Sponsor reserves the right to amend or adjust the Index Methodology from time to time in accordance with the rules governing the Index and accepts no liability for any such amendment or adjustment. Neither the Index Sponsor nor the Index Calculation Agent are under any obligation to continue the calculation, publication or dissemination of the Index and accept no liability for any suspension or interruption in the calculation thereof which is made in accordance with the rules governing the Index. None of the Index Sponsor, the Index Calculation Agent nor, where applicable, the Index Investment Advisor accept any liability in connection with the publication or use of the level of the Index at any given time.
The Index Methodology embeds certain costs in the strategy which cover amongst other things, friction, replication and repo costs in running the Index. The levels of such costs (if any) may vary over time in accordance with market conditions as determined by the Index Sponsor acting in a commercially reasonable manner.
BNP Paribas and its affiliates may enter into derivative transactions or issue financial instruments (together, the "Products") linked to the Index. The Products are not in any way sponsored, endorsed, sold or promoted by the sponsor of any index component (or part thereof) which may comprise the Index (each a "Reference Index") that is not affiliated with BNP Paribas (each such sponsor, a "Reference Index Sponsor"). The Reference Index Sponsors make no representation whatsoever, whether express or implied, either as to the results to be obtained from the use of the relevant Reference Index and/or the levels at which the relevant Reference Index stands at any particular time on any particular date or otherwise. No Reference Index Sponsor shall be liable (whether in negligence or otherwise) to any person for any error in the relevant Reference Index and the relevant Reference Index Sponsor is under no obligation to advise any person of any error therein. None of the Reference Index Sponsors makes any representation whatsoever, whether express or implied, as to the advisability of purchasing or assuming any risk in connection with the Products. BNP Paribas and its affiliates have no rights against or recourse to any Reference Index Sponsor should any Reference Index not be published or for any errors in the calculation thereof or on any other basis whatsoever in relation to any Reference Index, its production, or the level or constituents thereof. BNP Paribas and its affiliates shall have no liability to any party for any act or failure to act by any Reference Index Sponsor in connection with the calculation, adjustment or maintenance of the relevant Reference Index and have no affiliation with or control over any Reference Index or the relevant Reference Index Sponsor or the computation, composition or dissemination of any Reference Index. Although the Index Calculation Agent will obtain information concerning each Reference Index from publicly available sources that it believes reliable, it will not independently verify this information. Accordingly, no representation, warranty or undertaking (express or implied) is made and no responsibility is accepted by BNP Paribas or any of its affiliates nor the Index Calculation Agent as to the accuracy, completeness and timeliness of information concerning any Reference Index.
BNP Paribas and/or its affiliates may act in a number of different capacities in relation to the Index and/or products linked to the Index, which may include, but not be limited to, acting as market-maker, hedging counterparty, issuer of components of the Index, Index Sponsor and/or Index Calculation Agent. Such activities could result in potential conflicts of interest that could influence the price or value of a Product.
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