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

For marketing and information purposes by UBS. CNMV registration number (Comisión Nacional del Mercado de Valores): .  Representative in Spain for UBS funds established under foreign law: UBS Bank, S.A., MARÍA DE MOLINA, 4, E-28006 MADRID. Prospectuses, simplified prospectuses or Key investor information, the articles of association or the management regulations as well as annual and semi-annual reports of UBS funds are available free of charge from UBS, MARÍA DE MOLINA Nº 4, 28006 MADRID / AVENIDA DIAGONAL Nº 640, 2º A, E-08017 BARCELONA / FERNÁNDEZ Y GONZÁLEZ Nº 2, PLANTA PRINCIPAL, E-41001 SEVILLA / C/ROGER DE LAURIA Nº 7, 1ª PLANTA, 46002 VALENCIA / COSO Nº 33, 5º A, 50003 ZARAGOZA, CANTÓN PEQUEÑO 15, 4º, 15003 A CORUÑA. Before investing in a product please read the latest prospectus carefully and thoroughly. Units of UBS funds mentioned herein may not be eligible for sale in all jurisdictions or to certain categories of investors and may not be offered, sold or delivered in the United States. 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. 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 can increase or decrease 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 in this document are provided by UBS without any guarantee or warranty and are for the recipient's personal use and information purposes only. This document may not be reproduced, redistributed or republished for any purpose without the written permission of UBS AG. Source for all data and charts (if not indicated otherwise): UBS Asset Management

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.

In 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

According to the European fund UCITS directive, 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%. 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.

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.

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%


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