The firm boldly claims they “set new standards of transparency and risk management for commodity swap ETFs” and “unparalleled levels of transparency and investor protection in the ETF market”.
The four Ucits-compliant structures, listed on the London Stock Exchange this morning (23 January) are all branded iShares S&P GSCI Dynamic Roll and are their Agriculture Swap, Energy Swap, Industrial Metals Swap and Commodity Swap ETFs.
They are being promoted as an alternative to purchasing individual futures or investing directly in physical commodities.
The greater transparency comes from diversifying swap positions among a number of counterparties unaffiliated with BlackRock; managing this exposure through over- collateralisation daily of up to 120%; and using high quality collateral.
All the product information – including collateral and index holdings, swap counterparties, aggregate swap exposure and swap spreads – will also be updated daily and available on iShares’ website.
BlackRock’s strategic preference is still for physically-backed products though the company is keen to expand the range of commodity products available through swap-based propositions where appropriate.
