iShares, the Exchange Traded Funds (ETF) platform of BlackRock, has expanded its commodity range with the launch of four ETFs that set new industry standards for commodity swap-based funds. By utilising iShares’ unique swap-based ETF platform, the new funds are designed to provide unparalleled levels of transparency and investor protection in the ETF market.

The iShares S&P GSCI Dynamic Roll Agriculture Swap, iShares S&P GSCI Dynamic Roll Energy Swap, iShares S&P GSCI Dynamic Roll Industrial Metals Swap and iShares S&P GSCI Dynamic Roll Commodity Swap ETFs listed on the London Stock Exchange today. They track the latest generation of S&P GSCI indices and offer diversified exposure to agriculture, energy, industrial metals and the broad commodity market.
 
The funds provide efficient and diversified access to commodity markets in a UCITS-compliant structure, and are an alternative to purchasing individual futures or investing directly in physical commodities. Managed using iShares unique multi-counterparty swap-ETF platform, they offer investors some of the highest levels of transparency and investor protection in the ETF market, including:
 
The diversification of swap positions amongst multiple swap counterparties unaffiliated with BlackRock

The management of counterparty exposure through over collateralisation of up to 120% on a daily basis, using high quality collateral

The ability for investors to see detailed product information, updated daily on the iShares website. This information includes collateral and index holdings, swap counterparties, aggregate swap exposure and swap spreads

Clarity in product labelling
 
These standards reflect those advocated by BlackRock in its Global ETF Viewpoint, “ETFs: A Call for Greater Transparency and Consistent Regulation,” which called for industry-wide standards of disclosure, transparency and risk management. Within this, BlackRock stated its preference for developing physically-backed products, and that where exposures cannot be achieved in this format (such as with these types of commodities products) swap-based products should meet certain standards of transparency, collateralisation and counterparty diversification.
 
Axel Lomholt, Head of iShares Product Development EMEA, says: “We’ve seen sustained interest from professional investors for new commodity exposures, driven by a desire to diversify their portfolios. To meet this demand, we have extended our commodity range with new exposures, delivered in a highly transparent, risk-managed and regulated UCITS structure.
 
“These new products are the latest step in our efforts to bring new levels of disclosure, transparency and risk management to the ETF sector. They are based on iShares unique multi-counterparty swap platform, and set a standard for the quality and level of collateralisation that we believe can help improve the marketplace for ETFs.”