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ETF Securities see over $60m flow into exchange-traded physical precious metal platforms in first month of trading
23/05/07
- European demand for precious metals is reflected in strong uptake of physically-backed platinum, palladium, silver, gold and a precious metal basket ETCs
- Precious metals contribute 50% of all ETC inflows in past three months
ETF Securities Limited ("ETF Securities"), the global pioneer in exchange traded commodities, has seen strong demand for its physically backed, precious metal exchange traded commodity platforms on multiple European exchanges - with assets under management now standing at over $60m after only one month's trading.
The listings coincide with last year's launch of 31 ETCS on five major European exchanges. Including all 36 ETCs now available to investors, precious metal ETCs have accumulated $192 million in new assets over the past three months or 50% of all net investment inflow.
Since launching the world's first physical ETC precious metals platform on the London Stock Exchange (LSE) - allowing investors to trade all four major precious metals (platinum, palladium, silver, gold) individually or as a basket - ETF Securities has recorded a flood of demand. Subsequent listings in the weeks following the LSE launch, on the Deutsche Börse, Euronext Amsterdam, and Euronext Paris saw a further swell of demand as investors rushed to get easy access to the range of precious metals.
Each of the five new ETCs is backed by physical precious metals held in the vaults of the Custodian and the securities trade in the ETC segment of the LSE, Deutsche Börse, Euronext Amsterdam and Euronext Paris. ETCs are simple and transparent securities that enable investors to gain exposure to commodities via ordinary brokerage accounts without trading futures or taking physical delivery.
All of the new ETCs are backed by physical metal bars held by or on behalf of the Custodian HSBC Bank USA N.A., who is the world's leading Custodian for ETCs. All metal must conform to the rules for Good Delivery of the London Bullion Market Association (LBMA) and London Platinum Palladium Market (LPPM) and may not be lent out.
ETCs are relatively new investment tools which enable investors to gain exposure to commodity prices without trading futures or taking physical delivery. The 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 management fee which accrues daily.
Similar to Exchange Traded Funds, ETCs are open-ended securities which can be created or redeemed on demand provided that the relevant amount of metal is delivered to the Custodian by Authorised Participants or market makers. Which currently include Flow Traders, IMC, Nyenburgh, Susquehanna, Morgan Stanley & Co, Barclays Capital, UBS, ABN Amro, HVB, HSBC, Merrill Lynch, Citigroup, Winterflood and JP Morgan. Investors can buy and sell the new ETCs through regulated brokers or approved market makers. ETCs can be traded with all the same order types available to equities, including market, limit and stop orders. They can also be shorted through stock borrowing or CFDs.
Commenting on the success of the precious metal Exchange traded commodity platforms across Europe, Chairman of ETF Securities, Graham Tuckwell said:
"We are very pleased with early investor take-up. Initial trading figures have backed our assertion of the huge European demand for precious metals. We at ETF Securities are delighted to provide an investment vehicle whereby investors can get access to range of precious metals, which have historically been extremely difficult to access - previously precious metals such as platinum and palladium have only been available through derivates or a limited number of equities.
"Unlike many other commodities, precious metals are durable, homogenous and easily stored, enabling the ETCs to be backed by allocated physical bars which have transparent pricing and carry no credit risk. As a result, the new 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 provide investors with an investment vehicle that tracks the price of precious metals, not a portfolio of equities. Uncorrelated to equities, they can provide investors with an additional tool for portfolio diversification."
For further information please contact:
Roman Townsend / John Kelly Tel: +44 (0) 20 7786 4875 /4821
Penrose Financial
- Notes to editors -
To obtain a copy of the prospectus please visit the website at
www.etfsecurities.com/msl
The management of ETF Securities Limited pioneered the development of Exchange Traded Commodities (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. Since then, ETF Securities has listed its entire range of ETCs on Europe's major exchanges (Frankfurt, Paris, Amsterdam and Italy) with each exchange creating a separate ETC segment.
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 Metal 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 Metal Securities Limited.
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. Metal Securities have not been and will not be registered under the US Securities Act or any other applicable law of the United States. Metal 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. If the Issuer determines that any Security Holder is a Prohibited US Person (being a US Person who is not a "qualified purchaser" as defined in the Investment Company Act), the Issuer may redeem the Metal Securities held by that Security Holder in accordance with the provisions described in the Prospectus. Metal Securities may not be purchased with plan assets of any "employee benefit plan" within the meaning of section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any "plan" described in section 4975(e)(1) of the United States Internal Revenue Code of 1986, as amended (the "Code") or any entity whose underlying assets include "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, which employee benefit plan, plan or entity is subject to Title I of ERISA or section 4975 of the Code or any United States Federal, state, or local law or non-United States law that is substantially similar to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code (any such employee benefit plan, plan or entity, a "Prohibited Benefit Plan Investor"). If the Issuer determines that any Security Holder is a Prohibited Benefit Plan Investor, the Issuer may redeem the Metal Securities held by that Security Holder in accordance with the provisions described in the Prospectus."
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