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ETF Securities' physical precious metals ETCs accumulate over $1,865m of assets in
first year of listing
29/05/08
- ETFS Physical Gold (PHAU) is the fastest growing European gold ETC, accumulating over $1 billion (1.1mn oz) in its first year
- ETFS Physical Platinum (PHPT) now exceeds $776 million (360,000 oz), the largest platinum ETC holdings in the world
- ETFS Physical Silver (PHAG) exceeds $175 million (9.6mn oz)
- ETFS Physical Palladium (PHPD) now exceeds $90 million (199,000 oz)
ETF Securities Limited, the global pioneer of exchange traded commodities (ETCs), sees growth of over $1,865 million assets in its Physical precious metals ETCs. This growth has far exceeded precious metal analyst forecasts, proving how popular physically backed precious metals ETCs have become.
Demand for precious metals ETCs reflects investors' increasing demand for physically-back precious metals as confidence in the US dollar as a store of value and financial sector creditworthiness has plummeted in reaction to the subprime mortgage crisis in the US and an extremely accommodative monetary policy by the US Federal Reserve. Demand has also been a result of investors searching for real asset inflation hedges and diversification away from equities, bonds and credit products.
Since listing on April 23, 2007, ETF Securities' physical precious metals ETCs have accumulated total assets of $1.9 billion. These ETCs are traded in three currencies (USD, EUR, GBP) and are listed on five European exchanges including the London Stock Exchange, Deutsche Borse, Euronext Amsterdam, Euronext Paris and Borsa Italiana. In total, ETF Securities' have over $2.2 billion in precious metals ETCs including newly listed Short and Leveraged ETC products.
ETFS Physical Gold (PHAU) is the most highly traded ETC in Europe and ETFS Physical Gold (PHAU) and ETFS Physical Platinum (PHPT) have experienced strong interest. ETFS Physical Gold (PHAU) has seen monthly trading volumes increase to $308 million and total assets rise to $1 billion. ETFS Physical Platinum (PHPT) has seen monthly volumes increase to $57 million and total assets grow to $776 million. ETFS Physical Platinum (PHPT) has seen assets increase 3.8 times since December and is the largest Platinum ETC in the world.
ETFS Physical Silver (PHAG) has seen monthly volumes increase to $70 million, and total assets grow to $90 million. ETFS Physical Palladium (PHPD) has seen monthly volumes increase to $20 million and total assets grow to $80 million.
ETFS Physical PM Basket (PHPM) which has an allocation of 42% gold, 20% platinum, 26% silver and 12% palladium has seen total assets grow to $175 million.
All physical precious metal ETCs are backed by physical, allocated metal - uniquely identifiable bars which carry no bank credit risk. The precious metal bars and ingots are held in trust in London by the Custodian HSBC Bank USA N.A., which is the world's leading Custodian for ETCs. The metal held with the Custodian must conform to the rules for Good Delivery of the London Bullion Market Association (LBMA) and London Platinum Palladium Market (LPPM). ETCs are only issued once metal is confirmed as being deposited into the Issuer's bullion account with the Custodian.
In total, ETF Securities now offers sixteen precious metal ETCs which give investors the choice of physical, long, leveraged and short exposure to platinum, palladium, gold, silver and baskets of precious metals. ETCs are simple to access as they are traded in three currencies (Euros, USD and Sterling) and listed on five major European Exchanges including the London Stock Exchange, Euronext Paris, Euronext Amsterdam, Deutsche Borse and Borsa Italiana. Each Exchange has created unique ETC trading segments resulting in trading volumes exploding by 500% to over $600 million per week. Of this, precious metals ETC trading contributes 30% of total volumes, having increased from $30 million per week to approximately $200 million, an increase of 565% in 2008. Total precious metal ETC assets have increased by $2 billion in the past twelve months to over $2.2 billion.
ETF Securities has also picked up The Most Innovative ETF Hybrid Product Award for Europe 2007 at the 2008 Global ETF Awards® dinner Exchangetradefunds.com. The 2008 Global ETF Awards® winners were based on over 400 votes cast from ETF organizations and industry professionals worldwide and statistical data provided by Morgan Stanley.
Commenting on the one year anniversary of the launch of ETF Securities physical precious metals ETC platform, Nik Bienkowski, Chief Operating Officer, said:
"Since launching our platform of Physical Precious Metals ETCs a year ago, we have seen huge demand for these new products. ETCs have lowered many of the barriers that previously prevented many investors from investing in the precious metals market, including access, trading and operational risks, custody and transaction costs. Globally, more than US$35 billion has been invested in commodity ETCs/ETFs with US$25 billion in precious metals ETCs.
"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.
"The award of The Most Innovative ETF Hybrid Product Award for Europe 2007 is certainly a positive recognition that ETF Securities is developing and pioneering exchange traded products that are providing investors with new and innovative ways of meeting their investment goals. A crucial element of our ETCs is that they track the price of commodities, not a portfolio of equities. This is an important distinction as commodities have a very low and often negative correlation with equities, providing a unique investment vehicle for genuine portfolio diversification. In addition our ETCs are extremely low cost (annual fees of 0.49% for long ETCs) relative to most commodity equity funds which often have up front fees of up to 5% and annual management fees often ranging from 1.5-3%."
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 ETCs on Europe's major exchanges (Frankfurt, Paris, Amsterdam and Italy) with each exchange creating a separate ETC segment. With Classic, Forward, Short and Leveraged ETCs available, investors can execute most trading and investment strategies previously not possible.
ETF Securities continues its series of conferences for finance professionals:
Overview of the fundamentals of each Precious metals: Platinum, Palladium, Silver and Gold
Date: 12th June
Time: 12:00am - 19:00pm London Time
City: London
Venue: City Conference Centre, 80 Coleman St,
EC2R 5BJ www.cityconferencecentre.co.uk
Guest Speakers:
- James Steel (HSBC)
- Anton Berlin (Norilsk)
- Philip Klapwijk (GFMS)
- David Jollie (Johnson Matthey)
- Ross Norman (The Bullion Desk)
Click here to register
www.etfsecurities.com/en/events/etfs_events_register.asp
To learn more about ETF Securities go to: www.etfsecurities.com
This press release 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. Securities issued by Commodity Securities Limited (" Securities") have not been and will not be registered under the US Securities Act or any other applicable law of the United States. These 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. These 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 Securities held by that Security Holder in accordance with the provisions described in the Prospectus. The 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 Securities held by that Security Holder in accordance with the provisions described in the Prospectus relating to those Securities."
"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 sub-indices (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, 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).
To obtain a copy of the prospectus please visit the website at www.etfsecurities.com

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