ETF Provider Due Diligence Series: Inside UBS

Morningstar is taking an in-depth look at some of the biggest ETF providers in the market. This week we look under the bonnet at UBS

Jose Garcia Zarate 17 July, 2019 | 9:11AM
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The growing popularity of exchange-traded funds means that investors now have tens of thousands of trackers to choose from. But where to start? Considerations including assets under management, tracking error, charges and the track record of the fund group. But with hundreds of ETF all promising to track the same market, picking a fund can seem an impossible task.

In a new series, Morningstar analysts take an in-depth look at some of the biggest ETF providers in the market. This week we look under the bonnet at UBS. 

UBS Asset Management launched its first ETFs in 2001 and is now the fourth-largest ETF provider in Europe with a market share of 6.6% as of May 2019.

The group offers more than 110 ETFs, around 80% of which are physically replicated funds covering various equity and fixed income markets. It also has a selection of commodity ETFs and the largest range of Socially Responsible Investment (SRI) and currency-hedged trackers in Europe. However, the group’s products are not known for being among the most competitively priced available to investors.

As part of a top European asset manager, UBS ETFs boasts a solid portfolio management team with a well-established leadership. The stability of the team is a key strength, and we believe UBS ETFs benefit from the expertise of UBS Asset Management, where passive investment and indexing are a core offering. We also value the firm’s heavy investment in the development and ongoing improvement of its in-house-built portfolio optimisation platform. 

Committed to ESG

UBS committed early to providing products suitable for ESG-conscious investors. The group has a Sustainable Investing Research and Stewardship team, which is responsible for conducting and supporting ESG integration and stewardship activities across asset classes. The team is part of the Sustainable and Impact Investing team.

We value the fact that in the past few years UBS has strengthened its stewardship capabilities and processes. Its expanded stewardship team works closely with ESG analysts and portfolio managers for proxy voting and engagement activities and we view positively the group’s willingness to collaborate with other shareholders.

Any synthetically replicated ETFs are explicitly identified by the use of SF in the product’s name. The sole counterparty for these trackers is UBS Investment Bank. This can be seen as a conflict of interest.

You can find the full report in "A Guided Tour of the European ETF Marketplace" here.

Read our analysis of: iShares, LyxorVanguardInvesco, Xtrackers


The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Jose Garcia Zarate

Jose Garcia Zarate  is Associate Director of Passive Strategies Research for Morningstar Europe

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