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World’s leading exchange traded commodities group
to quote precious metals platform
backed by physical metal
on the Australian Securities Exchange
16/12/08
- ETF Securities, the world’s leading issuer of Commodity Exchange Traded
Products led by Australian entrepreneur Graham Tuckwell, enters the Australian
investment market
- 4 new physically backed exchange traded commodities (ETCs) to be quoted on
the Australian Securities Exchange
- Silver, platinum, palladium and a precious metal basket ETC available to
Australian investors for the first time
- Purchase of Gold Bullion Securities Ltd (ASX Code – GOLD)
The global pioneer in exchange traded commodities (ETCs), ETF Securities, today announced
quotation of a range of physically-backed, precious metal, exchange traded commodities on the
Australian Securities Exchange.
This is the first time that silver, platinum, palladium or a precious metals basket have been made
available to Australian investors through ordinary brokerage accounts, which will enable
Australian investors to take advantage of a whole new range of investment opportunities.
ETF Securities has also formally completed the acquisition of the world’s first gold ETC – Gold
Bullion Securities, quoted on the Australian Securities Exchange since early 2003 (ASX:GOLD).
Metal Securities already available to Australian investors:
| ETFS Physical Gold* |
ASX code: GOLD |
* Previously called Gold Bullion Securities.
The four new Metal Securities to be quoted are:
| ETFS Physical Platinum |
ASX code: ETPMPT |
| ETFS Physical Palladium |
ASX code: ETPMPD |
| ETFS Physical Silver |
ASX code: ETPMAG |
| ETFS Physical PM Basket |
ASX code: ETPMPM |
The basket will consist of platinum, palladium, silver and gold.
First dealings in these securities are expected to commence on the ASX on Friday the
19th December.
ETF Securities enters the Australian market on the back of strong client demand for precious
metals and physically-backed ETCs worldwide.
During these volatile times Gold and precious metals have benefitted from the market desire to
reduce risk with investors using precious metals as a store of value and as a safe haven. In
addition it has been shown that Gold has no correlation with Equities thereby providing additional
diversification benefits to investment portfolios.
Over the past year Gold has risen 35% in AUD terms compared to a 46% fall in the ASX 200, an
outperformance of 81%*. The other precious metals - silver, platinum and palladium have all also
outperformed the ASX 200 by at least 14% over the last year with silver outperforming the ASX
200 by 40%.
ETCs have been in great demand recently in a time where many other asset classes are
experiencing outflows. ETCs have lowered many of the barriers that previously prevented many
investors from investing in the precious metals market, including access, trading and operational
risks, and secure storage.
All the physical precious metal ETCs are backed by allocated metal – uniquely identifiable bars
which carry no bank credit risk. As a result, physical ETCs save investors from many of the
difficulties associated with purchasing precious metals such as access to physical bars and then
having to store and insure those bars.
ETCs are designed to offer investors a simple, cost-efficient and secure way to access the precious
metals market. They provide investors with a return equivalent to movements in their spot price
less a small annual management fee, which accrues daily.
Similar to Exchange Traded Funds (ETFs), ETCs are open-ended securities, which can be created
or redeemed on demand (by market-makers) provided the relevant amount of metal is delivered
to the custodian. Investors can buy and sell ETCs through regulated brokers or approved market
makers; they can be traded in the same way as equities, including market, limit and stop orders.
The minimum trade size is one security and settlement is T+3 (trade date plus three business
days). The official market maker for all five ETCs will be Citibank Global Markets Australia.
The management of ETF Securities created the world’s first ETC, Gold Bullion Securities, which is
quoted in Australia and London and has over A$5.1 billion of assets*. The new ETCs are backed
by physical allocated metal held by the custodian HSBC N.A., the world’s leading custodian for
ETCs with over A$30 billion of precious metals held for such products. All physical metals held
with the custodian must conform to the rules for good delivery of the London Bullion Market
Association (LBMA) and London Platinum Palladium Market (LPPM).
ETCs have been around since 2003, when the first one, Gold Bullion, quoted on the ASX. Now
there are A$8.6 billion of ETCs. They are relatively new investment tools, which enable investors
to gain exposure to commodity prices without trading futures or taking physical delivery.
Australian Graham Tuckwell is the founder and chairman of the ETF Securities group of
companies. He is also the founder and chairman of Gold Bullion Securities Limited in Jersey and
Australia, which obtained the world's first quotings of a commodity on a stock exchange.
Previously, Graham was the founder and managing director of Investor Resources Limited, a
boutique corporate advisory firm.
Commenting on the Australian launch of this new range of physical ETCs, Graham
Tuckwell, chairman of ETF Securities, said:
"We are very excited to be quoting 4 very exciting products on the ASX this week. The stature
and performance of GOLD has paved the way to bring the rest of ETF Securities Physical metal
suite to the ASX. We believe that investors will appreciate the unique structure that will provide
private banks, institutions and other investors access to these important precious metals through
an equity-type structure.
Our decision to launch this range of precious metals is two-fold. First, it comes in the wake of
increasing global demand for precious metals through ETCs, which have seen steady growth over
the last four years to over A$38 billion. Second, we want to offer investors exposure to a broad
range of precious metals, which have historically been extremely difficult to access.
“ETCs provide investors with an investment vehicle that tracks the price of precious metals, not a
portfolio of equities. Investors understand that under different market conditions, there are times
when commodities will outperform comparable commodity companies and times when commodity
companies will outperform the relevant commodities. Uncorrelated to equities, ETCs can provide
investors with additional portfolio diversification.”
“The Australian market has always been very focused on resource equities, and investors now will
have the opportunity to get direct exposure to precious metals to complement equity investment.
These products have no credit risk as ETCs are 100% backed by allocated bullion held in trust;
this has become a very important selling point in today’s markets given the increased focus on
credit and counterparty risks.”
Commenting on the quoting of this new range of physical ETCs, Richard Murphy,
General Manager - Equity Markets, said:
“ASX worked with Gold Bullion Securities on the world’s first Gold ETC that quoted on ASX in 2003
and we’ve been a keen observer of Graham Tuckwell’s success over the last five years in taking
the ETC concept to Europe and the US. The new precious metal ETCs will join a wide range of
existing ETFs quoted on ASX.
“ETFs and ETCs constitute a diverse range of securities that share some common characteristics –
they all accurately track equity indices, or in this case commodity prices at a very low cost
compared with managed fund costs. Their continuous applications and redemptions results in low
tracking error and provide investors with exposure to indices or commodities that would otherwise
be hard to access.
“These ETCs are also taking advantage of ASX’s new quotation platform – AQUA, which is tailored
for managed funds, ETFs & ETCs, and Structured Products. The ETCs will trade, clear and settle
on ASX systems in the same way as ordinary shares. ETCs based on precious metal prices also
provide investors with un-leveraged diversification into a separate asset class from the more
traditional equity and debt securities on ASX.”
For further information please contact:
Financial & Corporate Relations
Kathy Tricolas
Tel:+61 2 8264 1008 or +61 412 929 191
- Notes to editors –
To obtain a copy of the prospectus please visit the website at www.etfsecurities.com
The management of ETF Securities Limited pioneered the development of Exchange Traded
Commodities (ETCs) making the world’s first ETC, Gold Bullion Securities, available in Australia
and London in 2003 and then the world’s first entire ETC platform which was quoted on the
London Stock Exchange in September 2006. Since then, ETF Securities has quoted its entire
range of ETCs on Europe’s major exchanges (Frankfurt, Paris, Amsterdam and Italy) with each
exchange creating a separate ETC segment. ETCs quoted by the management of ETF Securities
now exceed A$9.6 billion.
* as at 12th December 2008
This advertisement does not constitute or form part of any offer or invitation to sell or issue, or
any solicitation of any offer to purchase or subscribe for, any transferable securities to be issued
by Gold Bullion Securities Ltd or any other securities, nor shall it or any part of it nor the fact of
its distribution form part of or be relied on in connection with any contract or investment decision
relating thereto. Any offer, invitation or solicitation shall be made solely by means of the
prospectus and recipients of this advertisement who are considering a purchase of securities
following distribution of the prospectus in connection therewith are reminded that any such
purchase should be made solely on the basis of the information contained in such prospectus and
any supplementary prospectus(es). This advertisement does not constitute any recommendation
or financial advice regarding the securities of Gold Bullion Securities Ltd. Anyone considering
making an investment in Gold Bullion Securities should consult their financial planner and read
the Prospectus in full first, as every individual’s investment objectives and circumstances are
different,. The offer for securities is only made in the prospectus dated 11 July 2008 and is
available from the Company or the Company’s website: www.goldbullion.com.au.
This press release is not being distributed to, and must not be passed on to, the general public in
Australia. The communication of this press release or any other document issued in connection
with the offer and sale of the ETCs is only being made to and directed at Australian wholesale
investors and other persons to whom it may otherwise lawfully be communicated or otherwise
lawfully be made (all such persons together being referred to as “relevant persons”). The
communication of this press release (or any other document issued in connection with the offer
and sale of the ETCs) must not be acted upon or relied upon by persons who are not relevant
persons. Persons distributing this press release must satisfy themselves that it is lawful to do so
This is not an offer of securities for sale in the United States. Gold Bullion Securities have not
been and will not be registered under the US Securities Act or any other applicable law of the
United States. Gold Bullion Securities are being offered and sold only outside the United States to
non-US persons in reliance on the exemption from registration provided by Regulation S of the US
Securities Act or in transactions exempt from the registration requirements of the Securities Act.
The Issuer has not been and does not intend to become registered as an investment company
under the Investment Company Act and related rules.
The World Gold Council takes no responsibility as to the contents of this document and does not
carry on activities relating to the sale of Gold Bullion Securities. Gold Bullion Securities will be the
sole obligation of Gold Bullion Securities Ltd. The World Gold Council does not provide any
guarantee in respect of Gold Bullion Securities and is not responsible or liable for Gold Bullion
Securities or any acquisition of Gold Bullion Securities in any way, unauthorised persons should
not rely on the information contained herein.
Background and Key Comparisons
AUD Precious Metals and ASX 200
Key points
- Gold has increased 35% over the past year in AUD terms, compared to a 46%
fall in the ASX 200 - an outperformance of 81%.
- Gold has risen almost 55% since January 2007 in AUD terms – this compares
with a 28% drop in the MSCI World and a 38% drop in the ASX 200.
- The daily volatility of both the ASX 200 and the AUD Gold price has been
similar since January 2007, with a daily standard deviation of around 1.7% for
both series.
- Gold cumulative returns have grown almost 14 times the rate of the ASX 200
over the past 5 years.
- Gold has outperformed the largest ASX Gold Mining stock (Newcrest Mining)
by 50% over the past year.
- Gold has outperformed all but three of the individual constituent ASX 200
stocks over the past 12 months in AUD terms.
- Other precious metals – silver, platinum, palladium have all outperformed the
ASX 200 by at least 14% over the past year.
- Outperformance vs. the ASX 200 over the past 12 months (AUD returns):
platinum 21%, palladium 14%, silver 40%.
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