UBS ETF In order to proceed, you must confirm that you are an institutional investor based in Germany.

  • Institutions within the meaning of § 1 para. 1b of the Banking Act (i.e. credit institutions and financial services institutions);
  • Insurance companies;
  • Asset management companies, investment companies as well as foreign AIF management companies and management companies commissioned by them;
  • Pension funds and their management companies.

This information and the information below does not represent distribution within the meaning of § 293 of the Capital Investment Act (Kapitalanlagegesetzbuchs; KAGB).

  • Investments in these products should be made only after studying the current prospectus and Key Investor Information Document in detail.
  • The information was prepared without reference to any specific or future investment objective, financial or tax situation or requirement on the part of a particular individual or group.
  • The information is intended for information purposes only and constitutes neither an offer nor a solicitation to buy or sell securities of any kind or related financial instruments.
  • The products or securities described below may be unsuitable or prohibited for sale in all jurisdictions or to certain categories of investors.
  • The following information and opinions have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith, but are not guaranteed as being accurate, nor are they a complete statement or summary of the securities, markets or developments referred to.
  • The following details and opinions are provided without any guarantee or warranty and are for the recipient's personal use and information purposes only.
  • UBS AG and/or other members of the UBS Group may have a position in and may make purchases and/or sales of any of the securities or other financial instruments mentioned below.
  • This and the following information may not be reproduced, redistributed or republished for any purpose without written permission from UBS AG.
  • Representative in Germany for UBS Funds established under foreign law: UBS Deutschland AG, Bockenheimer Landstraße 2-4, 60306 Frankfurt am Main. Sales prospectuses, simplified prospectuses, Key Investor Information Documents, articles of association and contractual terms as well as annual and semi-annual reports of UBS Funds are available free of charge from UBS Deutschland AG or UBS Asset Management (Deutschland) GmbH, Bockenheimer Landstraße 2-4, 60306 Frankfurt am Main.
  • Units of the UBS Funds mentioned above may not be offered, sold or delivered in the US. The information mentioned herein is not intended to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments.
  • The following information and charts may contain information on performance. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissions and costs have a negative impact on performance.
  • If the currency of a financial product or financial service is different  from your reference currency, the return may rise or fall as a result of currency fluctuations. This information pays no regard to the specific or future investment objectives, financial or tax situation or particular needs of any specific recipient.
  • The details and opinions contained on this website are provided without any guarantee or warranty and are for the recipient’s personal use and information purposes only.
  • This and the following information does not constitute tax, legal or investment advice. Please contact your tax, legal and/or investment advisor.
  • Source for all data and charts (if not indicated otherwise): UBS Asset Management. © UBS 2017

ETF securities lending Generate additional returns and reduce investors' net costs

UBS ETFs engage in securities lending for select physically replicated ETFs with the aim to generate additional returns and thus reduce investors' net costs. UBS attaches particular importance to a responsible securities lending concept.

What is ETF securities lending?

In ETF securities lending, the lender (UBS ETFs) transfers a given number of securities from its ETF portfolio to a third party (borrower) for an agreed period in return for a fee.

  • UBS ETFs engage in securities lending only for select physically replicated ETFs domiciled in Switzerland, Ireland, and Luxembourg 
  • The objective is to reduce investors' net costs through additional income.
  • Securities lending transactions of UBS ETFs are overcollateralized to a minimum of 105%.
  • A haircut is additionally applied to Swiss-domiciled ETFs
  • Careful selection of borrowers and daily mark-to-market valuation of collateral serve to minimize risk
  • High degree of transparency through daily publication of collateral assets for each subfund at ubs.com/etf > products

How can you minimize securities lending risk for ETFs?

According to the European fund UCITS directive and the Swiss CISA, securities lending may be up to 100%. Actual lending rates for UBS ETFs have been considerably lower. UBS ETFs have set a cap of 50% of the net asset value of an ETF on securities lending.

To minimize securities lending risk for UBS ETFs, borrowers are carefully selected and monitored on a daily basis. Before borrowers receive the securities, they must provide the lender - the ETF - with collateral. The collateral assets serve to secure the borrower's obligations to the lender. The collateral is transferred to a completely separate custody account or collateral account that is ring-fenced from the lender's balance sheet.

Securities lending may be terminated on demand by the lender on a daily basis. A daily mark-to-market valuation of loans and collateral ensures that the value of the collateral posted by the borrower is always adjusted to the correct level. In addition, securities lending transactions of UBS ETFs are always overcollateralized to a minimum of 105%. For Swiss-domiciled ETFs, a valuation haircut is additionally applied to the underlying collateral. Securities lending ceases when it is terminated by the ETF or the borrower's demand is satisfied. The collateral held is returned to the borrower only after the securities have been returned to the ETF.

Securities

UBS ETFs offer a high degree of transparency through daily publication of collateral assets for each subfund.


How can ETF securities lending help to generate additional returns?

The borrower pays the ETF a fee for the duration of the securities lending period. In addition, all entitlements such as coupons or dividends paid on the securities while on loan are passed on to the ETF in the form of a manufactured payment.

As such, securities lending enables the fund to generate additional revenues, which are reflected in the net asset value (NAV) and directly reduce net costs to investors as a result.


Securities lending for ETFs domiciled in Switzerland, Luxembourg and Ireland

Currently accepted collateral for ETFs domiciled in Luxembourg and Ireland

For UBS ETFs, domiciled in Luxembourg and Ireland, that engage in securities lending, the following types of securities are currently accepted as collateral (excluding securities of the borrowing counterparty):

  • Fixed income securities issued and/or guaranteed by governments of the following countries:
    • The following G10 countries: Belgium, the Netherlands, Canada, Sweden, France, Switzerland, Germany, Japan, UK and USA
    • Only the following OECD countries: Australia, Austria, Denmark, Finland, Luxembourg, New Zealand and Norway, as well as
       
  • equities in the form of world stock indices

Type and level of collateralization required for Luxembourg and Ireland domiciled ETFs*

 

Type of collateral

Type of borrowed securities

Government bonds

International equities

International equities

105%

105%

US equities

105%

105%


Get to know us - we gladly assist you in finding the answers you need