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.

Cyclical and defensive sectors Well-positioned to take advantage of economic cycle


Companies with cyclical business models benefit in particular from economic upturns. But in an economic downturn defensive stocks are more stable. With the UBS ETF (IE) MSCI EMU Cyclical UCITS ETF and the UBS ETF (IE) MSCI EMU Defensive UCITS ETF, investors can gain an ideal positioning in any phase of an economic cycle. This enables them to benefit from the altered performance of various economic sectors in different business phases.

How do cyclical and defensive sectors work?

Companies and their business models react differently to economic trends. Some companies' profits see a sharp rise in an economic upturn, but experience an especially heavy drop when the economy falters. They are considered to be highly dependent on the economic cycle. The term "cyclical company" has been given to these kinds of companies.

Their counterparts are called defensive companies. These companies generate relatively stable profits throughout all phases of the economic cycle, but see less of a benefit when the economy expands. Typical examples of cyclical companies range from furniture manufacturers to financial companies.

Utility providers and companies from the health care industry are examples of firms that are seen as particularly defensive. Figure 1 illustrates classification of the sectors, where contribution of each sector is assigned 20 percent to ensure an equal representation in the combined portfolio.

MSCI EMU Cyclical and Defensive Sector Indexes

Source: MSCI

Whether a company's business model is cyclical or not also has an impact on the performance of its shares. Historical data, for example, show that:

  • Cyclical sectors feature stronger share price fluctuations, meaning higher volatility, than the equity market as a whole.
  • Cyclical sectors also correlate more with the overall market, and therefore move more in unison with the market than defensive sectors. Cyclical sectors also feature a higher correlation among one another.
  • Phases of outperformance of defensive stocks have alternated with the outperformance of cyclical shares, at least until the financial crisis in 2008. Over the period of financial turmoil, defensive sectors have been considerably more robust. The differences in phases of greater stress, such as at the peak of the debt crisis in the Eurozone, were especially clear.
Comparison of cyclical and defensive sectors over time

Sources: MSCI, UBS Asset Management, as of December 2014. Past performance is no guarantee of future trends.

Taking these kinds of long-term patterns as a basis, the index provider MSCI developed the family of MSCI Cyclical & Defensive Indexes. UBS ETFs now put these indexes within the reach of investors wanting to get involved in the equity market of the Eurozone with two ETFs. With the UBS ETF (IE) MSCI EMU Cyclical UCITS ETF and the UBS ETF (IE) MSCI EMU Defensive UCITS ETF, investors have the option to make tactical use of the developments of sectors in a varying economic cycle.

The two ETFs benefit from the fact that the performance differences between cyclical and defensive sectors tend to return to their historical averages in the long run as in Figure 2. Investors are able to benefit from this pattern by rotating tactically between cyclical and defensive sectors – and back – at the optimal time linked to the economic cycle. 

The UBS ETF (IE) MSCI EMU Cyclical UCITS ETF reflects the performance of equities from five commercial sectors:

  • information technology
  • materials
  • financials
  • consumer discretionary goods
  • and industrials

Given that the ETF is based on the MSCI EMU Cyclical Sectors Capped Index, all sectors are weighted equally at the index adjustment dates taking place regularly, meaning each sector is given a weighting of 20 percent.

This helps to offset any possible imbalances resulting from over- or underrepresentation of any sector (e.g. overconcentration in financials or energy). The equal representation of sectors differentiates these investment strategies from the conventional approach, where sector weighting is done exclusively according to the market capitalization of the underlying companies, resulting in sector asymmetries.

The ETF physically replicates its reference benchmark, meaning it invests directly in the equities included in the index. The total expense ratio (TER) comes out to 0.25 percent per year.

The UBS ETF (IE) MSCI EMU Defensive UCITS ETF reflects the performance of equities from five commercial industries:

  • consumer staples
  • energy
  • health care
  • telecommunication services
  • and utilities

The reference index is the MSCI EMU Defensive Sectors Capped Index. Similarly, the individual sectors are also given an equal weight of 20 percent each at the index adjustment dates.

The ETF physically replicates its reference benchmark, meaning it invests directly in the equities included in the index. The total expense ratio (TER) comes out to 0.25 percent per year.

Cyclical and Defensive Sectors ETFs in focus

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