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Exchange Traded Commodities shatter
trading volume records again
13/08/08
- ETF Securities’ ETCs trade a total of $1.4 billion last week
- ETC trading volume now contributes over 60% of all ETF/ETC trading
volumes on the London Stock Exchange (LSE)
- ETFS Short Crude Oil (SOIL) is now the most liquid ETF/ETC on the
LSE, trading 150% more than the FTSE100
- Physical Gold ETCs most highly traded commodity, trading $2.3 billion
on the LSE in July
- ETCs trading volumes increase by 1,000% during 1H08 to $11 billion
ETF Securities Limited, the global pioneer of exchange traded commodities
(ETCs), saw record trading volumes in its Exchange Traded Commodities (ETC)
platform over the past 6 weeks. A report issued by the London Stock Exchange
(LSE) yesterday showed that ETFS Short Crude Oil (SOIL) became the most
liquid product in the LSE’s ETF/ETC segment, contributing 22% of trading
volumes or $1.7 billion in July. Volumes are continuing to explode with ETFS
Short Crude Oil having almost eclipsed July’s record in only the first two weeks of
August. Physical Gold ETCs were the most popular commodity, contributing 29%
or $2.3 billion of ETF/ETC trading volumes.
ETFS Short Crude Oil (SOIL) has shot into first place on the LSE’s list of most
highly traded ETF/ETCs. ETFS Short Crude Oil traded almost $300 million last
Friday, breaking trading records for all ETCs with a new daily record. Trading in
SOIL has grown at an extremely rapid rate since it first listed on 22 February
2008, with volumes picking up in early June as the oil price rose quickly through
the US$130/bl level. Volumes then accelerated sharply in early July as the oil
price began its recent decline from the $145/bl price level. Trading volumes rose
from $45 million per week in May to $650 million last week. As a result, ETFS
Short Crude Oil traded 150% more than the FTSE100 ETF last week.
Investors are piling into ETFS Short Crude Oil (SOIL) for a number of reasons
including strong pent-up demand for a simple, transparent and cost-effective
method of hedging portfolios against the risk of a decline in the oil price. It also
reflects some investors taking a negative directional view on the oil price after an
exceptionally sharp rise. Investors may also be using ETFS Short Crude Oil to
implement pair trades against other commodities (such as the popular short
oil/long gold trade) as well as pairing purchases of ETFS Short Crude Oil against
purchases of certain resource-related equities.
Physically backed gold ETCs also continue to shine. As a result of the LSE’s two
physically backed gold ETCs, ETCs took three of the top four spots on the LSE’s
ETF/ETC trading report with ETFS Physical Gold (PHAU) the second most traded
ETC. Combined, gold ETCs are now the most popular commodity, trading more
than $1.3 billion last month or 29% of all ETF/ETC volume. These volume
numbers are consistent with gold being one of the most liquid commodities in the
world. Gold ETCs also contribute approximately 50% of assets under
management for ETCs, a pattern which is consistent across the world and not just
limited to Europe.
In total, ETCs make up two-thirds of all the London Stock Exchange’s ETF/ETC
trading volumes. Last week, ETCs traded $1.2 billion of the $1.8 billion total
ETF/ETC volume. During the first six months of 2008, ETCs traded in excess of
$11 billion, more than 1,000% more than for the same period the previous year.
ETF Securities now offers more than 120 ETCs which give investors greater
choice to implement different investment strategies with the choice of physical,
long, forward, leveraged and short exposure to a wide range of commodity
sectors. 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 to $1.2 billion last week. Total assets are
approximately $10 billion.
Commenting on the yesterday’s trading, Nik Bienkowski, Chief Operating
Officer, said:
“We are not surprised that commodities and more specifically gold and oil ETCs
continue to shatter records for trading volumes and inflows. “The fact that an
ETC now trades more than the FTSE100 ETF is testament to the fact that
investors have been wanting access to asset classes other than bonds and
equities. ETFS Short Crude Oil (SOIL) adds to this flexibility and accessibility as
it was previously extremely difficult for investors to gain short oil exposure.
“With assets growing by nearly 500% in the past twelve months and volumes
growing by more than 1,000% compared to the same period last year, ETCs have
become an asset class that no one can ignore.
“ETCs have been designed to be accessible, efficient, liquid and low-cost products
for investors. Our platform approach to ETCs allows any investor at any time to
trade commodities in the same way they can buy any equity. ETCs are listed on
five major European exchanges, trade in three currencies and have the largest
pool of market makers and Authorised Participants than any other comparable
product. As a result, its not surprising that ETCs have dominated LSE trading
volumes.”
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.
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 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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