Credit Suisse has launched two new commodity index ETNs – Commodity Benchmark ETN (CSCB) and the Commodity Rotation ETN (CSCR) – to access diversified commodity exposure, and begun trading on the NYSE ARCA.
CSCB is the first exchange traded product in the US market to offer investors access to the Credit Suisse Commodity Benchmark Total Return Index.
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The Credit Suisse Commodity Benchmark Total Return Index underlying the CSCB ETN is a long-only diversified commodity benchmark index composed of notional futures contracts on 34 physical commodities. The index seeks to provide wider diversification and closer reflection of the overall global commodity complex than existing commodity indices.
The index features an extended roll period of 15 days per month. The index also invests in contracts that expire between one to three months (where available), spreading exposure across multiple delivery periods, versus the more traditional front-month contract only investment.
The Credit Suisse Commodity Backwardation Index, underlying the CSCR ETN, is a long-only diversified commodity index composed of single-commodity indices that follows a rules-based strategy to select eight commodities based on the price of the commodity futures contracts of various terms.
The index measures the level of backwardation or contango between two observation points on the curve. Each month, the Index takes a notional weighted long position in eight single-commodity sub-indices from a universe of 24 eligible sub-indices.
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By GlobalData"CSCB provides an alternative to the established commodities exchange traded products and offers more commodities and a longer roll period, in a rules based, transparent strategy," said Greg King, head of exchange traded products in Credit Suisse’s Investment Bank. "CSCR provides a ‘Commodities 2.0’ solution that offers an investable way to allocate to the commodities that exhibit the most backwardation or least contango."
