UBS ETF Importante informazione legale per favore, leggere il presente disclaimer prima di procedere oltre.

This site (hereinafter, "UBS website") operated by UBS Asset Management (Italia) SGR Spa ("UBS") has been set up by UBS and contains information provided by UBS. In accessing or consulting the UBS website, the user accepts and agrees to comply with the following usage limitations and terms and conditions.

The information given on the UBS website is solely for information purposes; it does not constitute nor can it be interpreted as an invitation, offer or recommendation to acquire or place investments of any kind or to make an investment or dispose of assets, or as advice or a recommendation of a legal, tax or any other nature. The information to be found on the UBS website does not reflect any individual's specific or future investment objectives, financial circumstances or tax situation, risk profile or experience and knowledge, nor the particular needs of any specific user.

Before making any decision about investments, you should the prospectus carefully and obtain specific and professional advice.

N.B.: this Web page provides professional investors with access to the entire UBS ETF product range. However, certain products on this Web page may NOT be authorized, recognized or registered for public distribution in your country nor in any other country. Should this be the case, these products must not, under any circumstances, be marketed to the public nor may clients be provided with marketing materials on these products. The display of marketing material in client areas is then also strictly prohibited. No reference may be made to these funds when client mailing campaigns. If you did not intend or have no authorization to view the full ETF product range, we ask you not to proceed further. Access the website as a private Investor.

The entire content of the UBS website, and all information it contains are subject to copyright. All rights are reserved. It is possible to download or print on paper individual pages and/or sections of the UBS website provided none of the notices on intellectual property rights or copyright are removed. Under no circumstances does downloading, copying or reproducing from the UBS website using any data medium, material, software or other medium confer any rights to the information, material or software, which are and shall remain the sole property of the owners. IThe UBS website, or any parts thereof, may not be reproduced, either in full or in part, sent or transmitted, by electronic or other means, without the prior written consent of UBS. By the same token, the prior the prior written consent of UBS is required to establish connections or links to the UBS website or to use the UBS website or its contents, either in full or in part, for activities or services intended for the public or for commercial usage in any way.

Access to the UBS website and consultation of the information it contains are subject to the following limitations on use, which are automatically accepted by users accessing the UBS website.

Even if UBS makes every reasonable effort to obtain information from sources considered to be reliable, it gives no assurance that the information, data, notices, or opinions given on the UBS website are accurate, reliable or complete.

The information and opinions given in the UBS website come without any guarantee, whether explicit or implicit in nature.

Under no circumstances, including wilful misconduct and gross negligence, can UBS be held responsible for any losses, costs, charges and expenses, of whatever kind, deriving from or related to the access, use, or application of the UBS website or browsing or linking to other sites, which can be accessed from the UBS website. This exclusion of liability also extends to losses arising from loss of earnings, onsequential loss or damage, applying equally to cases of contractual and extracontractual liability.

Gaining access to certain sites linked to the UBS website using a link may entail leaving the UBS website. All users of the UBS website are hereby informed that UBS has not undertaken any measures to verify or monitor the content of sites linked to the UBS website, and that UBS neither assumes nor accepts any responsibility for the content or functioning of those sites, nor for the products, services or other articles offered on such sites or for the data, notices or information hey contain.

As regards the information, data and notices on the UBS website, please note that UBS and/or its directors, officers, employees or non-employee workers may have had interests or positions relating thereto or have undertaken major securities transactions connected therewith. Furthermore, they may have or have had a relationship with major companies or may provide or have provided financial services or other services or they may be or have been directors of such companies.

Past returns on an investment is not necessarily indicative or a guide to future results. The value of an investment may fall or rise rapidly and investors may not necessarily recover their initial outlay. Besides the normal trend for each investment, the exchange-rate fluctuations of foreign currencies may cause the value of the investments to rise or fall.

The UBS website is not intended for use in any jurisdiction where its publication, distribution or availability is unlawful because of the user's nationality, place of residence, or for any other reasons. Any persons subject to such restrictions are prohibited from accessing the UBS website. UBS shall not be liable for any failure to observe such restrictions.

Replication Strategies Physical and synthetic replication

UBS ETFs employ both physical and synthetic replication strategies to ensure optimal replication of the Index. Learn more about the functionality of replication strategies to ensure optimal index replication.

How is an index incorporated into a portfolio?

The objective of an exchange traded fund (ETF) is to track as closely as possible the index on which the ETF is based in order to provide investors in the ETF the same performance relative to the market underlying the index.

Indices are based on theoretical calculations, however, which means that costs incurred in practice, for example, for the purchase or sale of securities represented in the index are not reflected in the index calculation. Nevertheless, these costs are charged whenever an index and its performance are replicated for an investment.

How closely an ETF tracks the performance of its underlying index is therefore critical. Ideally, the performance of the ETF differs from that of the index solely in the costs and fees incurred. Since for example indices tracking only the stock market of a single country apply different criteria for index replication compared to an index containing stocks from multiple countries, the criteria for an exact index replication differ from index to index. For these reasons, UBS ETFs utilize a variety of index replication methods.

Full physical replication

The ETF invests in the securities represented in the index in accordance with their index weighting.

Optimized physical replication

The ETF invests only in those securities represented in the index that are needed to achieve a performance very close to that of the index.

Synthetic replication

The ETF invests in a securities portfolio and exchanges its performance for that of the index.


How does the purchasing process for replication methods work?

The purchasing process is in principle identical for all replication methods – however, physical delivery of the securities applies only to physically replicated ETFs.

How does the purchasing process for replication methods work?
  1. The investor purchases ETF units on the stock exchange or directly from a market maker or authorized partner (OTC trading)
  2. The market maker or authorized partner either pays cash (for physically and synthetically replicated ETFs) or delivers the requisite securities (only for physically replicated ETFs) to the ETF

What are the specifics of a physical replication of an index?

In the case of full physical index replication, the ETF acquires all securities represented in the underlying index in accordance with their index weightings. Hence, the ETF is in physical possession of the index components and thus an exact replica of the index. If any changes are made to the index, for example through index adjustments or capital actions of the represented securities, the ETF replicates these changes, making transactions necessary on a regular basis. The ETF regularly distributes income, in the form of dividends or coupons for example.

The full physical replication method is characterized by simplicity and minimal tracking error.

Physical replication
  1. The ETF is in physical possession of all securities represented in the index in accordance with their index weighting
  2. All index adjustments and capital actions are identically replicated
  3. Some ETFs lend out securities from their portfolio for a fee

Securities lending


A number of select physically replicated ETFs engage in securities lending in order to generate additional returns and reduce investors' net costs, whereby the ETF's securities are lent out for a fee. Securities lending transactions of UBS ETFs are overcollateralized to a minimum of 105%.


What's the optimized physical replication method?

In the case of optimized physical replication, the ETF holds a sample of the securities in the underlying index. Analytical tools and mathematical optimization procedures are implemented to define a subset of the index constituents that will achieve a return similar to that of the original stocks represented in the index. The optimized physical replication method can be utilized to increase liquidity and minimize tracking error.

The optimized physical replication method is particularly suitable for very broad-based indices. For example, the MSCI World Index comprises approximately 1,600 stocks from a variety of markets, jurisdictions and currency zones. Accordingly, full physical replication of the index would involve high transaction costs. A number of these securities are not very liquid or have only minimal impact on the performance of the Index due to their low weighting. Transaction costs can be reduced by excluding these securities.

  1. The ETF is in physical possession of a subset of the index components, which is used either for very broad-based indices or for indices with illiquid securities
  2. Optimization procedures are implemented in order to lower transaction costs, increase liquidity and minimize tracking error
  3. Some ETFs lend out securities from their portfolio for a fee 

Securities lending


A number of select physically replicated ETFs engage in securities lending in order to generate additional returns and reduce investors' net costs, whereby the ETF's securities are lent out for a fee. Securities lending transactions of UBS ETFs are overcollateralized to a minimum of 105%.

In the case of synthetic index replication, the performance of the index underlying the ETF is achieved through a swap. The ETF enters into a swap agreement with an investment bank, the swap counterparty. The content of this agreement is the transfer of the ETF's cash flows to the swap counterparty, which in return guarantees the performance of the tracked index to the ETF. The risk associated with precise index tracking is transferred from the ETF to the swap counterparty. As physical ownership of the securities represented in the index is no longer a prerequisite for participation in the index performance, it is possible to efficiently track markets that for example are impossible or difficult to access due to trading restrictions.

UBS employs two different swap structures in synthetic replication: the fully funded swap and a combined model (fully funded swap / total return swap and asset portfolio).

In this replication method, the swap counterparty receives the cash inflow to the ETF and in return agrees to deliver the index performance to the ETF. The swap counterparty achieves this performance by investing in securities and derivatives that track the index performance. In order to protect the ETF against the risk of the swap counterparty defaulting on its obligations, the swap counterparty collateral provides 105% collateralization in the form of government bonds issued by G10 countries and supranational bonds. The collateral assets are held in a segregated account at an external custodian bank in the name of the ETF (transfer of ownership). The ETF has immediate access to the collateral in the event that the swap counterparty defaults on its obligations.

In this replication method, the cash flow to the ETF is split in a ratio of approximately 80:20.

Fully funded swap (FFS)

Roughly 20% of the fund's assets are used by the ETF to enter into a fully funded swap agreement with the swap counterparty, in which the swap counterparty agrees to deliver the index performance. In order to protect the ETF against the risk of swap counterparty defaulting on its obligations, the swap counterparty provides 105% collateralization in the form of government bonds issued by G10 countries. The collateral assets are held at an external custodian bank in the name of the ETF (transfer of ownership). The ETF has immediate access to the collateral in the event that the swap counterparty defaults on its obligations.

Total return swap and asset portfolio (TRS + AP)

Roughly 80% of the fund assets are used by the ETF to purchase a basket of securities, the asset portfolio. The basket may contain only a subset of the index constituents or securities with no reference to the underlying index and is optimized on the basis of risk and return considerations so that only little rebalancing is required and transaction costs are kept low. In a swap agreement, the ETF exchanges the returns on this portfolio for the index performance.

  1. The ETF purchases a basket of securities for approx. 80% of its cash flows
  2. The ETF transfers the performance of the basket to the swap counterparty
  3. The swap counterparty guarantees the index performance
  4. The ETF enters into a fully funded swap with the swap counterparty for approx. 20% of its cash flow
  5. The swap counterparty guarantees the index performance
  6. For each transfer of ownership, the swap counterparty provides 105% collateralization in the form of G10 government bonds

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