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ETF Securities experiences $185m of inflows into Exchange Traded
Commodities last week
02/12/08
- Last week saw largest weekly inflows into ETCs for past 19 weeks
- ETCs experience net inflows for each of past 3 weeks
- $175m flows into physically backed gold and platinum ETCs
- $33m of inflows into oil ETCs last week, $93 million in the past 4
weeks
Flows into short and leveraged ETCs indicate positive outlook
ETF Securities Limited (ETFS), the global pioneer of Exchange Traded
Commodities (ETCs), and provider of Exchange Traded Funds (ETFs) has seen
strong inflows into ETCs last week. Net inflows of $185 million were
experienced across a range of ETCs including precious metals, energy and
industrial metals. Net inflows into ETCs have occurred for the past three
weeks. The inflows are a result of changing investor sentiment across a
number of commodities. In addition, the collateralisation of the full value of
over 120 ETCs has significantly reduced the credit exposure of ETCs issued by
ETFS Commodity Securities Limited.
ETCs recorded $185 million of inflows last week as investors returned to ETC
trading despite the Thanksgiving holiday in the US when lower volumes are
usually expected. ETFS Physical Gold (PHAU) experienced $140 million of
inflows which was the largest inflow into physically backed gold ETCs of the
past seven weeks. The Price of PHAU ended the week at $80.99, up 10.4%
since Thursday 20 November - each PHAU represents 0.0994 ounces of
physical gold. For every physically backed security issued, a matching amount
of allocated physical precious metal is deposited with the Custodian, HSBC. In
total, physical gold ETCs have experienced $1,640 million of inflows in 2008.
ETFS Physical Platinum (PHPT) experienced inflows of $35 million last week.
This included 300,000 securities on Friday which was the largest number of
PHPT securities ever issued on any single day. Last week's issuance of ETFS
Physical Platinum securities marks the largest number of PHPT securities
issued since February 2008. The Price of PHPT ended up 5.9% last week at
$85.33 - each PHPT represents 0.0992 ounces of physical platinum.
Oil inflows were also strong last week. Combined flows into ETFS Crude Oil
(CRUD), ETFS Brent (OILB), ETFS WTI (OILW) and ETFS Leveraged Crude Oil
(LOIL) rose by $33 million last week, the 5th consecutive weekly increase.
Inflows into long oil ETCs have now risen by $93 million over the past four
weeks, reversing the strong outflows during August and September. ETFS
Short Crude Oil (SOIL) recorded its seventh consecutive week of outflows
during the week, indicating a more positive outlook since oil prices moved into
the $50 per barrel range. This is in contrast to only a few months ago when
oil prices peaked at around $147 per barrel and ETFS Short Crude Oil (SOIL)
was the most highly traded ETC and ETF on the London Stock Exchange
(LSE).
ETF Securities has also seen increasing flows into Short and Leveraged ETCs.
Flows last week indicate a more positive outlook as redemptions of Short ETCs
outnumbered applications by 2:1, indicating a reduction in short positions.
Consistent with an improvement in sentiment, Leveraged ETCs experienced a
rise in net inflows with applications also outnumbering redemptions 2:1
(indicating an increase in long positions). Last week, flows into ETF Securities'
range of ETCs indicate a more positive outlook for energy, precious metals
and industrial metals. Flows into agriculture ETCs showed a mixed outlook.
ETF Securities recently enhanced its ETC platform through the 100%
collateralisation of the 120 ETCs which track DJ-AIG commodity indices. This
collateralisation means that counterparty risk has largely been removed. ETF
Securities also offers investors six physically backed precious metal ETCs that
are backed by allocated metal - uniquely identifiable bars which carry no bank
credit risk.
Recently ETF Securities listed Europe's first carbon ETC - ETFS Carbon (CARB)
is designed to track the price of carbon emissions allowance futures traded on
ICE. In total, ETF Securities now offers more than 130 ETCs with over $6.3
billion in assets. The ETCs provide investors with a wide variety of investment
strategies with ETCs offering physical, long, forward, leveraged and short
exposure to all 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.
Commenting, Nik Bienkowski, Chief Operating Officer, at ETF
Securities, said:
"Last week's inflows into Exchange Traded Commodities show many investors
are still interested in a wide range of commodities despite the recent pull back
as a result of the weakening economy. $185 million of inflows into ETCs is a
good achievement in any market. The prices of most ETCs have fallen by 25%
to 50% since 1 July 2008. The pattern of flows into ETCs last week indicate
that investors may be starting to view many commodities more positively.
"A fall in demand has driven commodity prices down recently, however the
tight supply situation in a number of commodities has not changed
significantly. Recent record flows into ETFS Physical Platinum and oil ETCs,
whose prices have fallen by approximately 65% from their peaks this year,
show that some commodities may now be offering good long term potential.
Regardless of an investor's view, ETF Securities offers both long and short
ETCs which enable investors to profit in a rising or falling market."
Nichols Brooks, Head of Research and Investment Strategy, at ETF
Securities, also commented:
"ETFS Physical Gold (PHAU) experienced $140 million of inflows last week.
The strong flows into PHAU appear to be part of increasing fund flow into
physical gold including coins, gold bars and jewelry. Physical demand for gold
has surged as investors have become increasingly concerned about the
outlook for major currencies as central banks have been forced to ease
aggressively and governments to substantially increase fiscal spending and
debt in an attempt to offset collapsing private sector growth. The price of
ETFS Physical Gold ended the week at $80.99, up 10.4% since Thursday 20
November."
For further information, please contact:
ETF Securities continues its series of conference calls for finance
professionals:
ETF Securities UCITS III and Permitted Investments
Date: 3rd December 2008
Time: 11:00am or 15:00pm London Time
Our next call will discuss:
- Legislative Basis
- Requirements for UCITS Authorisation
- Permitted Investments
- Investment Restrictions
- Exchange Traded Commodities as Permitted Investments
- ETCs and Embedded Derivatives
For more information on the event above and ETF Securities forward
schedule of conference calls
visit: www.etfsecurities.com/en/events/etfs_events_calls.asp
Notes to Editors:
ETF Securities Ltd is a provider of Exchange Traded Commodities (ETCs) and
Exchange Traded Funds (ETFs). ETF Securities is independently owned is the
European market leader in ETCs. The management of ETF Securities
pioneered the development 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. ETF Securities has most recently launched the largest
platform of thematic sector ETFs in Europe providing exposure to European
firsts such as Coal, Steel, Shipping and Nuclear Power.
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 securities (together the "Securities") of ETFS
Commodity Securities Limited, ETFS Metal Securities Limited or ETFS Oil Securities Limited or any
shares (the "Shares") of ETFS Fund Company public limited company (the "Fund") or any other shares
or 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 relevant prospectus (plus any supplements thereto) in the case of
the Securities or the prospectus together with the relevant sub-fund supplement in the case of the
Shares (in each case the "Prospectus") and recipients of this advertisement who are considering a
purchase of Securities or Shares following distribution of the Prospectus are reminded that any such
purchase should be made solely on the basis of the information contained in such Prospectus. This
advertisement does not constitute any recommendation regarding the Securities or the Shares.
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 Shares or Securities 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 Shares or Securities) must not be acted upon or relied upon by persons who are not relevant
persons. The Fund is a collective investment scheme for the purposes of the FSMA and is a recognised
scheme for the purposes of the FSMA. 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 Shares or Securities in, from or otherwise involving the United Kingdom.
This is not an offer of securities for sale in the United States. The Shares and Securities have not been
and will not be registered under the US Securities Act or any other applicable law of the United States.
The Shares and 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. None
of ETFS Commodity Securities Limited, ETFS Metal Securities Limited, ETFS Oil Securities Limited and
ETFS Fund Company public limited company (each an "Issuer") has been or intends to become
registered as an investment company under the United States Investment Company Act of 1940 (as
amended) (the "Investment Company Act") and related rules. Neither the Shares nor the Securities or
any beneficial interest therein may be reoffered, resold, pledged or otherwise transferred in the United
States or to US persons. If an Issuer determines that any holder of Shares is a US Person or any holder
of Securities 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 Shares or Securities (as the case may be)
held by that Security Holder in accordance with the provisions described in the Prospectus. Neither the
Shares nor the Securities may 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 or
Shares held by that person in accordance with the provisions described in the relevant 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 are 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).
ETF Securities Limited, ETFS Commodity Securities Limited, ETFS Metal Securities Limited and ETFS Oil
Securities Limited are each regulated by the Jersey Financial Services Commission.
To obtain a copy of the prospectus please visit the website at
www.etfsecurities.com
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