FTSE Group (“FTSE”), the award winning global index provider grants UBS AG the first licence for the recently launched currency solution, FTSE WPU (World Parity Unit). The swift adoption of FTSE WPU will allow UBS to offer a range of investment and hedging products linked to FTSE WPU, to its global client base. The licensing highlights investor appetite for new currency-risk management tools, as currency fluctuations continue to play a significant risk in international investment.
Launched earlier this year, FTSE WPU is an innovative addition to the growing range of FTSE’s non-equity indices, which includes a variety of currency and commodity indices. FTSE WPU represents a single ‘currency unit’ comprised of a liquid basket of the seven most traded developed market currencies, the four BRIC currencies and storable commodities; gold and oil.
The multi-asset solution employs a robust and transparent rules-based methodology, and takes into account the growing power of emerging markets over global pricing policy, as well as the significance of commodities in mitigating inflation risk.
Tom Payne of UBS comments: “We expect that FTSE WPU will become a widely-used tool for asset managers, funds and wealthy individuals seeking to protect the real value of their portfolio in a globalised economy. UBS is pleased to add FTSE WPU to the wide range of transparent investment products and hedging solutions which we provide from the UBS Strategy Indices platform.”
Roy McInnis, Managing Director Global Strategic Accounts, FTSE Group comments: “Managing currency risk is more important than ever for institutional investors as they continue to diversify investments internationally. FTSE WPU has been designed to minimise this risk through a diversified and tradable basket of currencies and commodities. We are pleased to licence FTSE WPU to UBS to enable them to provide pioneering solutions for their clients globally.”