Commodities remain the best performing asset class over the past 10 years - new report shows

• Gold prices increased for nine consecutive years and up almost 300% over the past 10 years
• ETF Securities' annual Commodities Review highlights price and flow trends to help investors in 2010

SYDNEY, 11 February 2010 - ETF Securities (ETFS) has released its annual global Commodities Review which shows that commodities were the best performing major asset class after equities in 2009 - and maintained by a wide margin their position as the best performing major asset class over the past decade.

Aimed as a helpful guide for investors, the annual review tracks some of the main commodity price and flow trends in 2009 and compares the returns of various commodities indices with other asset classes such as equities, fixed income, hedge funds, real estate and currencies.

On a relative basis, commodities largely matched or outperformed real estate, cash and bonds and were generally a close second to equities in 2009. Correlations among asset fell over 2009 however the longer term average correlation between commodities and other asset classes remains low - providing strong diversification benefits for investors.

The Commodities Review 2009 reveals the best performing commodities in 2009 were metals tied to the industrial cycle with ETFS Physical Palladium up 114%, ETFS Physical Silver up 57% and ETFS Physical Platinum up 63%.

The global pioneers of Exchange Traded Commodities (ETCs) and 3rd Generation Exchange Traded Funds (ETFs), ETFS has seen its physically-backed silver, platinum and palladium ETC holdings reach their highest levels since inception, according to the Review.

Nigel Phelan, ETFS's Head of Sales Australia and New Zealand, said it was not surprising to see precious metals performing so strongly and with potential fundamental issues could also provide medium term support to prices.

"Stagnating long term new gold supply should provide support to gold prices in the medium term. Mine production has been in trend decline since 2001 with costs of exploration and mining increasing. With silver supply also falling approximately 2% in 2009 and supply from scrap recycling and official government sales falling over recent years, this tightening of supply would inevitably place upward price pressures on silver and gold," Mr Phelan said.

"On the demand side, the main driver for platinum and palladium has been autocatalyst sales for use in new cars. As the automotive industry rebounded during 2009 and with increasing car ownership in emerging markets, prices for platinum and palladium have recovered and should remain buoyant with the fundamentals pointing towards increased demand," he said.

Going for gold

ETFS Physical Gold prices also rallied 25% in 2009 in response to ongoing investor concerns surrounding the potential impact of unprecedented global fiscal and monetary stimulus on currencies, inflation and government debt positions. These extraordinary demand conditions led to the US Mint's supply of American Eagles - the world's most popular bullion coin - running out in November last year.

Mr Phelan said gold's low volatility was also a demand driver. "While other commodities have had higher returns, their prices have been highly volatile. Gold on the other hand has one of the highest risk return profiles across commodities as well as other asset classes," he said.

When the risk return profile of ETFS physically-backed offerings are compared, gold provided the best returns of 275% with the lowest volatility of 18%, followed by platinum (230%/ 24%), then silver (219%/ 30%) and palladium (-11%/ 36%).

ETFS' global assets under management (AUM) climbed to an all-time high of US$16bn as a result of strong commodities markets, which is an increase of 130% over 2008 levels. Mr Phelan said the strong appetite for precious metals played a major role in this AUM growth.

"The holdings of physically backed ETCs were steady even during periods of price decline, indicating inflows are largely from investors building strategic long term holdings of ‘hard assets' to hedge against inflation and currency risks. The positive long term supply demand fundamentals are also a key draw card," he said.

A full copy of the ETF Securities Commodities Review 2009 can be found here

For further information please contact:

Suk Hee Lee
Honner Media
+61 (0)2 8248 3752
+61 (0)433 343 888


About ETF Securities

ETF Securities is a provider of Exchange Traded Commodities (ETCs) and 3rd generation Exchange Traded Funds (ETFs). The management of ETF Securities pioneered the development of ETCs, with the world's first listing of an ETC, Gold Bullion Securities in Australia and London in 2003 and then the world's first entire ETC platform which was listed on the London Stock Exchange in September 2006.

ETF Securities now offers more than 150 Exchange Traded Products (ETPs) with A$17.1bn (US$15bn) in assets as of 01/10/09.

The ETFs provide investors with a wide variety of investment strategies, with ETPs offering resource equities, physical, long, forward, leveraged and short exposure to all commodity sectors. ETPs are simple to access as they are traded in five currencies (EUR, USD, GBP, AUD and JPY) and listed on nine major exchanges globally including the London Stock Exchange, the New York Stock Exchange, the Tokyo Stock Exchange, NYSE-Euronext Paris, NYSE-Euronext Amsterdam, Deutsche Börse, Borsa Italiana, the Australian Securities Exchange and the Irish Stock Exchange.

To learn more about ETF Securities go to: www.etfsecurities.com

Regulatory Info

This press release has been issue by ETF Securities Limited, which is regulated by the Jersey Financial Services Commission, for journalists in Australia only. ETFS Metal Securities Australia Limited is a wholly owned subsidiary of ETF Securities Limited.

This press release appears as a matter of record only and does not constitute an offer to sell or an invitation to purchase any securities.

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