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LIENS DIRECTS
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ETF Securities announces record-breaking commodities launch
30/08/06
29 ETCs set to bring commodities to the ordinary investor
London - ETF Securities Ltd, a world pioneer of Exchange Traded Commodities (ETCs), is set to shatter investment records with the simultaneous launch of 29 separate ETCs in the UK, comprising 19 individual securities and 10 index securities.
The historic launch will balloon the number of existing ETFs and similar type securities in the UK to double what is currently available and give investors access to a comprehensive range of individual commodity securities for the first time, along with a comprehensive range of commodity index securities.
The 19 separate classes of commodity securities to be listed are:
- ETFS Aluminium
- ETFS Coffee
- ETFS Copper
- ETFS Corn
- ETFS Cotton
- ETFS Crude Oil
- ETFS Gasoline
- ETFS Gold
- ETFS Heating Oil
- ETFS Lean Hogs
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- ETFS Live Cattle
- ETFS Natural Gas
- ETFS Nickel
- ETFS Silver
- ETFS Soybean Oil
- ETFS Soybeans
- ETFS Sugar
- ETFS Wheat
- ETFS Zinc
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The 10 baskets of commodities to be listed are:
- ETFS All Commodities DJ-AIGCISM
- ETFS Agriculture DJ-AIGCISM
- ETFS Energy DJ-AIGCISM
- ETFS Ex-Energy DJ-AIGCISM
- ETFS Grains DJ-AIGCISM
- ETFS Industrial Metals DJ-AIGCISM
- ETFS Livestock DJ-AIGCISM
- ETFS Petroleum DJ-AIGCISM
- ETFS Precious Metals DJ-AIGCISM
- ETFS Softs DJ-AIGCISM
ETF Securities Ltd will list this entire platform of ETCs within the next few weeks, enabling investors to effectively trade commodities on major stock exchanges through ordinary brokerage accounts. Investors will be able to add any combination of individual commodities and/or baskets of commodities to their equity, bond and alternative asset portfolios. Investors will also be able to trade individual commodities tactically as opposed to, or as well as, equities in commodity companies.
Similar to Exchange Traded Funds, ETCs are relatively new investment tools which enable investors to gain exposure to commodity prices without trading futures or taking physical delivery. They are open-ended securities which can be bought and sold intraday by investors on a regulated exchange in the same way as any equity. The new ETCs will track the underlying commodity index and no trading or management of futures contracts is required. Pricing is provided by renowned market makers, is transparent and the ETCs are liquid, accessible, simple and flexible.
Indices tracking individual commodities are an innovation by Dow Jones and AIG-FP and these ETCs are a world-first. To date only a few individual ETCs have been listed, but investors will be able to track 19 different commodities through these new ETCs. The new ETCs will be the first listed products to track a series of sub-indices representing individual commodities along with commodity groups that have recently been added to the Dow Jones-AIG family of commodity indices. In addition, this will be the first time that price exposure to some of these commodities will be available on an exchange in European hours. In fact, for some of the commodities it will be the first time that the price exposure will trade electronically as opposed to open outcry.
The management of ETF Securities Ltd launched the world's first ETC (Gold Bullion Securities in Australia), listed Gold Bullion Securities in London in 2004, and then listed the world's first oil ETC, ETFS Brent Oil in July 2005. These products have attracted approximately US$2 billion in assets on the London Stock Exchange. Globally, ETCs have grown to over US$14 billion in assets.
Graham Tuckwell, Chairman of ETF Securities, commented: "Since launching the first ETC more than 3 years ago, we have seen huge demand for new products. This has lowered many of the barriers that previously prevented many investors from investing in the commodities market, including access, trading and operational risks, custody and transaction costs. Globally more than US$80 billion has been invested in commodity indices. And following the success of the first two securities - Gold Bullion Securities and ETFS Oil Securities - we decided the time was right to make the broadest possible range of commodities available to the investing public. With the launch of a record-breaking 29 new securities, we are enabling investors to tap into the ever-increasing appetite for commodities and to trade easily and cheaply on a single platform. Regular investors wanting to invest in the commodities market have previously had limited choice when trying to gain commodity exposure without exposing themselves to corporate and operational risks.
"Commodities used to be considered an 'alternative' investment but due to the development of global capital markets and new financial products like ours, that provide simple market access, commodities are becoming widely accepted as a mainstream asset class. While some commodities can be volatile, it is the correlation between different securities and different asset classes which can increase portfolio diversification and decrease portfolio risk, particularly when the correlation is negative or very low. It is also a particularly exciting time for commodities, with world-wide demand growing fast, particularly in China and India, and this is a trend we see continuing."
This press release is not a prospectus but an advertisement and investors should not subscribe for ETCs issued by ETFS Commodity Securities Limited except on the basis of information in the prospectus. A prospectus for ETFS Commodity Securities Limited will be published and to obtain a copy when published, or to obtain more information on ETF Securities Ltd, please visit the website www.etfsecurities.com.
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 ETFS Commodity Securities Limited 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 regarding the securities of ETFS Commodity Securities Limited
Application for approval of the prospectus to be issued by ETFS Commodity Securities Limited has been made to the Jersey Financial Services Commission (the "JFSC"). The JFSC have not yet approved such prospectus.
The communication of this press release is not being made by, and this press release has not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly this press release is not being distributed to, and must not be passed on to, the general public in the United Kingdom. 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 those persons in the United Kingdom falling within the definition of Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), or high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order or any person to whom it may 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. All applicable provisions of the FSMA must be complied with in respect of anything done in relation to the ETCs in, from or otherwise involving the United Kingdom.
This is not an offer of securities for sale in the United States. The offer and sale of the Commodity Securities have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act") and, subject to certain exceptions, may not be offered or sold within the United States. Any offering of securities to be made in the United States will be made by means of a Prospectus that will contain detailed information about the Issuer and management, as well as financial statements. No public offering of securities will be made in the United States and any offering will be made pursuant to an applicable exemption from the registration requirements of the Securities Act.
"Dow Jones," "AIG®" "Dow Jones-AIG Commodity IndexSM," and DJ-AIGCISM" are service marks of Dow Jones & Company, Inc. and American International Group, Inc. ("American International Group"), as the case may be, and will be licensed for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related sub-indices (including single commodity sub-indices) are not sponsored, endorsed, sold or promoted by Dow Jones, AIG Financial Products Corp. ("AIG-FP"), American International Group, or any of their respective subsidiaries or affiliates, and none of Dow Jones, AIG-FP, American International Group, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product(s).
For further information, please contact:
Graham Tuckwell (Chairman)
ETF Securities Limited
Tel: +44 (0) 20 7355 9810, +44 (0) 7910 112 756
Email : info@etfsecurities.com
Claire Burston/Ben Larter
Penrose Financial
Tel: +44 (0) 20 7786 4886/4876
Notes to editors:
ETF Securities Limited is the leading pioneer in developing Exchange Traded Commodities (ETCs) - securities which track commodity prices and trade on a stock exchange. The management of ETF Securities launched the world's first ETC (Gold Bullion Securities in Australia) and has since launched ETFS Oil Securities (OILB and OILW) and Gold Bullion Securities on the London Stock Exchange (LSE). To date these securities have attracted almost US$2 billion in assets.
The Dow Jones - AIG Commodity IndexSM(DJ-AIGCISM) is designed to be a highly liquid and diversified benchmark for the commodity futures market. It is composed of futures contracts on 19 physical commodities traded on U.S. exchanges, with the exception of aluminium, nickel and zinc, which trade on the London Metal Exchange (LME). The DJ-AIGCI family of indexes includes both the DJ-AIGCI (which is calculated on an excess return basis) and a total return index based on the DJ-AIGCI (the DJ-AIGCITRSM). In addition, there are nine sub-indexes, representing the major commodity sectors within the index: Energy (including petroleum and natural gas), Petroleum (including crude oil, heating oil and unleaded gasoline), Precious Metals, Industrial Metals, Grains, Livestock, Softs, Agriculture and ExEnergy. The DJ-AIGCI family of indexes also consists of single commodity indexes on all of the components currently part of the DJ-AIGCI, plus cocoa.
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