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ETF Securities continues explosive growth in 2008
15/01/08
- Record ETC inflows last week of $170m
- Assets Under Management jump 25% in past 5 weeks
- ETC trading volumes up 110% to $415 million per week
- Strong demand for Agriculture and Precious Metals ETCs are continuing from 2007
ETF Securities Limited has seen total Assets Under Management (AUM) grow in
the past 5 weeks by 25% to over $2.9 billion. Last week alone, ETF Securities
experienced one of its biggest ever weeks for AUM growth of over $170 million.
This demand has been a result of investors wanting to diversify their investment
portfolio into other asset classes which exhibit low correlation to equities and
bonds.
ETF Securities has also seen record flows into its new Forward (Exchange Traded
Commodities) ETCs. The Forward ETCs, which were listed on the London Stock
Exchange, Deutsche Borse and Euronext Paris in the last two months of 2007, are
the first ever listed products to track new Dow Jones – AIG forward commodity
indices. The forward ETCs are designed to provide investors with less volatility
and more options regarding exposure to backwardation and contango in the
commodity markets. As a result the Forward ETCs are proving popular among
those seeking to make a strategic allocation to commodities. The Forward ETCs
have gained over $130 million of assets since their launch in October 2007 with
200% growth in the past 4 weeks alone.
The asset growth is largely due to precious metals and agriculture ETCs, which
have both seen the greatest AUM increase and also highest returns over the past
6 weeks. Combined, precious metals and agriculture ETCs have contributed to
over 80% of the recent AUM growth.
Precious metal ETCs have now accumulated over $1.1 billion of assets since April
2007. In the past 6 weeks, precious metal ETCs have added $260 million or 43%
of new assets during that time. The new assets have been shared equally
amongst platinum, silver, gold and a precious metals basket. Over the same 6
week period commencing 3rd December 2007, platinum and palladium prices both
rose by 8%, the gold price increased by 13% with silver earning a 15.5% return.
In comparison, the S&P500 index fell by almost 5% while the FTSE 100 Index fell
by approximately 3% over that same period.
Agriculture ETCs have now accumulated over $1.0 billion of assets since their
launch in September 2006. In the past 6 weeks, agriculture ETCs have added
over $300 million with $233 million or 37% of total new assets being added to
three specific agriculture ETCs: ETFS Agriculture DJ-AIGCISM, ETFS Grains DJAIGCISM
and ETFS Softs DJ-AIGCISM. Agriculture prices have also continued to
rise in the first two weeks of 2008 after a number of them (for example wheat
and soybeans) were the best performers in 2007. Prices of ETFS Agriculture DJAIGCISM,
ETFS Grains DJ-AIGCISM and ETFS Softs DJ-AIGCISM are up 10% to 15%
since 3rd December 2007.
Matching the rapid rate of AUM growth has been the increase in ETC trading
volumes. European ETC trading volumes reached $415 million last week. This is
up 112% from $195 million during the first week of December. The growth since
the start of 2007 is even more impressive with average daily volumes increasing
eight-fold from $10 million per day to $80 million per day.
With over 50 ETCs listed on 5 different exchanges in Europe and 3 different
currencies, ETF Securities has made ETCs simple and accessible. ETCs have
brought commodities to the average investor, making it possible to benefit from
the additional diversification of non-correlated assets. With the DJ-AIG
Commodities IndexSM, agriculture and precious metal prices out-performing US
and UK equities by approximately 10% to 20% over the past 6 weeks, a 10%
allocation to commodities could have improved a diversified portfolio’s
performance by approximately 1% to 2% (an annualised rate of over 10%).
Commenting on the response of investors for ETF Securities’ explosive
growth in 2008 , Nik Bienkowski, Head of Listing and Research, said:
“Continued equity market volatility combined with economic uncertainty
regarding inflation and growth are weighing down equity markets. News
regarding the effects of the sub-prime crisis with new reports of significant capital
raisings being made by the world’s major investment banks is adding to the flow
of negative news surrounding the financial markets.
It is during these times that commodities and precious metals have tended to
outperform. Analysis of historical returns has shown that due to commodities’
low correlation with equities, commodities have tended to outperform equities
when equities experience negative monthly and annual returns. On average,
when equities experienced a negative 12-month return, commodities showed a
positive 12-month return approximately 70% of the time.
As a result, ETF Securities’ has experienced record growth of ETCs over the past
six weeks, with precious metals and agriculture experiencing the greatest
demand. Demand for precious metals and index ETCs also reflects investor’s
desire to allocate part of their portfolios from equities to commodities."
For further information, please contact:
Roman Townsend
Penrose Financial
Tel: +44 (0) 20 7786 4875
Notes to editors:
ETF Securities continues its series of conference calls for finance
professionals:
Fundamentals of Gold and Precious Metals
16 January 2008, 11:00am or 15:00pm or London Time
For more information
www.etfsecurities.com/en/events/etfs_events_calls.asp
Investment Case for Agricultural Commodities
17 January 2008, 11:00am or 15:00pm or London Time
For more information
www.etfsecurities.com/en/events/etfs_events_calls.asp
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
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.
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).
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