UBS today launched the UBS Oilfield Strategy Index. The new index is based on West Texas Intermediate crude.

“The strategy of the UBS-OSI is financially equivalent to owning the financial performance of an oil field producing WTI crude oil. This is achieved by going long a series of WTI crude oil futures contracts spanning the next five years,” it explains.

“This strategy contrasts with conventional commodity indices that are typically only exposed to 1-month futures contracts,” it notes.

“The oilfield strategy’s diversification across maturities in crude oil has historically provided higher returns and lower volatility than traditional commodity indices,” UBS adds. “It has achieved this whilst maintaining the portfolio diversification benefits of commodity investments.”

The firm says that structured products on this index will be available in various maturities and currencies, including US dollars, euros, Swiss francs and British pounds. “This innovative strategy index adds another means for investors to gain access to commodities and serves as the basis for a variety of financial structured products,” it notes.