iShares plans new ETF on Dow Jones-UBS Roll Select Commodity Index

By Toni Weeks

San Diego, Dec. 8 - iShares Delaware Trust Sponsor LLC announced plans for the Dow Jones-UBS Roll Select Commodity Index Trust, a new exchange-traded fund that aims to track the performance of the Dow Jones-UBS Roll Select Commodity Index Total Return. The index represents the returns on a fully collateralized investment in the DJ-UBS Roll Select Commodity Index before payment of expenses and liabilities of the trust.

The trust will be a commodity pool rather than an investment company registered under the Investment Company Act of 1940.

According to an S-1 filing with the Securities and Exchange Commission, the trust will initially hold long positions in commodity excess return futures contracts on the underlying index.

The trust may invest in short-term exchange-traded futures contracts on the DJ-UBS Roll Select Commodity Index in the future, if and when these contracts become available for trading on a commodities exchange, as well as in other types of futures and forward contracts.

The index is designed to reflect the positive or negative return over time resulting from an uncollateralized long position in its underlying futures contracts. It incorporates the impact of these rolls by rolling into eligible replacement contracts exhibiting the least contango or greatest backwardation instead of rolling into eligible replacement contracts with the next closest expiration. In addition, the index may replace its underlying futures contracts through rolls every month and further roll into contracts with nearer delivery dates than those that are being replaced.

San Francisco-based iShares Delaware Trust Sponsor LLC is the trust's sponsor. BlackRock Fund Advisors will serve as the commodity trading advisor. Greg Savage, a principal and registered associated person of BlackRock, will be principally responsible for the trading decisions for the trust.

The initial registration was for a token 20,000 shares at $50 apiece for proceeds of $1 million.

The trust's fees have not yet been determined.

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