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ETF Securities to issue 4 more ETCs providing investors with access to a different part of the commodities futures curve
27/11/07
- World first for listed access to platform of forward commodity indices via ETCs
- "ETFS Natural Gas has experienced increased assets and volumes on all five European Exchanges"
- First listed products ever to track the Dow Jones-AIG Commodity 3 Month Forward IndicesSM
Global pioneer in exchange traded commodities, ETF Securities (ETFS), will add to
its ground breaking Forward ETC platform by listing four new Exchange Traded
Commodities (ETCs) on the London Stock Exchange (LSE) today offering
investors the opportunity to gain direct and simple exposure to commodity
futures prices which are linked to the Dow Jones-AIG Commodity 3 Month
Forward IndicesSM.
The 4 new Forward Individual Securities are:
| Name of ETC |
LSE Code |
| ETFS Forward Natural Gas |
NGAF |
| ETFS Forward Heating Oil |
HEAF |
| ETFS Forward Lean Hogs |
HOGF |
| ETFS Forward Live Cattle |
CATF |
The new Forward ETCs will track 4 different individual commodity indices. In
total, there will be over 40 ETCs listed on the London Stock Exchange (LSE),
tracking both the Dow Jones-AIG Commodity IndexSM and the DJ-AIGCI 3 Month
Forward IndicesSM. The forward indices were only recently launched by Dow
Jones and AIG Financial Products Corp. due to increasing investor demand for
commodities and optimised indices.
Substantial demand from investors for more choice to different parts of the
commodity futures curve has led ETF Securities to create these new Forward
ETCs, providing investors with more choice and allowing investors to implement
different investment strategies in commodities. The demand for the new Forward
ETCs is a result of significant investor interest in commodities and increased
knowledge about commodities investing. The new Dow Jones-AIG Commodity 3
Month Forward IndicesSM have often shown lower volatility while historical
simulations shows that the effects of contango and backwardation have tended to
show improved performance.
The 4 new Forward ETCs have been chosen as the historical performance of the
relevant DJ-AIG Commodity 3 Month Forward IndicesSM had outperformed the
original index due to less contango or greater backwardation in the relevant
commodity futures. In addition, ETFS Natural Gas has experienced significant
demand and trading volumes on all 5 Exchanges where it is traded. With $125
million in assets, ETFS Natural Gas has the greatest assets of any ETC tracking a
DJ-AIG Individual Commodity IndexSM. Since their launch less than six weeks
ago, the 9 Forward Index ETCs have already accumulated over $30 million in
assets.
Demand for these new ETCs has been driven by investors searching for a means
to expose their portfolio to the benefits of backwardation* which can provide a
source of return in addition to the commodities price return. Due to the dynamic
nature of backwardation and contango, investors wish to be able to track different
commodity futures dependent on this feature.
Commenting on launching another world first, Graham Tuckwell, Chairman of ETF Securities, said:
"ETCs have now been available in Europe since December 2003 and their
simplicity and structure have now been embraced by the market. Many investors
have approached us showing an appetite for new ETCs priced off a range of
commodity futures. Increasing investor demand and knowledge has resulted in
investors wanting access to more choice and alternative trading and investment
strategies.
With the new range of Forward ETCs, ETF Securities is continuing its leadership
of the global ETC market by providing world first access to the commodity futures
curve.
Overall there has been a huge surge in global demand for ETCs and we recently
passed the mark US $2.2 billion invested in our offering of over 50 ETCs. With
listings on five of Europe's major exchanges ETF Securities has successfully
delivered simple, cost-efficient and accessible products for all investors."
David Shrimpton, Head of Product Management and Development at the
London Stock Exchange, said:
"I am delighted to welcome these four new forward-based Exchange Traded
Commodities to our markets. In just a year of operation our ETC market has
continually grown and evolved to respond to investors' need for greater choice
and flexibility, so that it now offers trading in over 50 Exchange Traded
Commodities, and over £2.4 billion worth of ETCs has been traded on the
Exchange's electronic order book alone."
* 'Backwardation' and 'contango' – definitions:
Backwardation refers to a downward sloping forward curve (as in an inverted
yield curve) or, more formally, it is the situation where, and the amount by
which, the price of a commodity for future delivery is lower than the spot price, or
a far future delivery price lower than a nearer future delivery.
Contango is the opposite to 'backwardation' and refers to an upward sloping
forward curve (as in the normal yield curve) in prices or, more formally, it is the
situation where, and the amount by which, the price of a commodity for future
delivery is higher than the spot price, or a far future delivery price higher than a
nearer future delivery.
For further information, please contact:
Roman Townsend
Penrose Financial
Tel: +44 (0) 20 7786 4875
Notes to editors:
The management of ETF Securities Limited pioneered the development of
Exchange Traded Commodities (ETCs), in 2003. Building on its success ETF
Securities created 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 broad range of ETCs on Europe's major exchanges (Frankfurt, Paris,
Amsterdam and Italy) with each exchange creating a separate ETC segment.
To learn more about ETF Securities go to: www.etfsecurities.com
The Dow Jones - AIG Commodity IndexSM(DJ-AIGCISM) and The Dow Jones -
AIG Commodity 3 Month Forward IndexesSM(DJ-AIGCI-F3SM) are designed to
be liquid and diversified benchmarks for the commodity futures market. They are
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). 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.
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.
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. Commodity Securities have not been
and will not be registered under the US Securities Act or any other applicable law of the United States.
Commodity 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. The
Issuer has not been and does not intend to become registered as an investment company under the
Investment Company Act and related rules. Commodity Securities and any beneficial interest therein
may not be reoffered, resold, pledged or otherwise transferred in the United States or to US persons.
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
Commodity Securities held by that Security Holder in accordance with the provisions described in the
Prospectus. Commodity 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 Commodity Securities held by that Security Holder in accordance with the
provisions described in the Prospectus."
"Dow Jones," "AIG®" "Dow Jones-AIG Commodity IndexSM," "DJ-AIGCISM", "Dow Jones-AIG
Commodity 3-Month Forward Index" 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 subindices
(including single commodity sub-indices) or 3-Month Forward Indexes 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, AIGFP,
American International Group, or any of their respective subsidiaries or affiliates, makes any
representation regarding the advisability of investing in such product(s).
To obtain a copy of the prospectus please visit the website at
www.etfsecurities.com
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