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ETF Securities to launch world’s largest Exchange Traded Currency platform
- 18 Currency ETCs providing long or short exposure to G-10 currencies
- Includes exposure to local interest rates
- Fully collateralised
- Exposure to world’s most liquid asset class which has outperformed
equities over 1yr, 3yrs and 5yrs
London, 04/11/2009, ETF Securities (ETFS), the global pioneer in Exchange Traded
Commodities (Commodity ETCs) and 3rd generation Exchange Traded Funds (ETFs) is planning
to launch the world’s largest and Europe’s first Exchange Traded Currency (Currency ETCs)
platform with trading expected to begin next week. Currencies are the most liquid asset class
with over $3.2 trillion of trading each day yet it is one of the last asset classes to be packaged
in the form of an exchange traded product. ETF Securities is a pioneer of ETCs having
launched the world’s first Commodity ETC platform in Europe between 2003 and 2006 and
which now has accumulated over $15 billion in assets and recent trading of approximately
$1.4 billion per week.
Initially, 18 Currency ETCs will be listed on the London Stock Exchange (LSE) which will track
recently launched MSFX Currency IndicesSM. The initial Currency ETCs provide long or short
passive exposure to G10 currencies versus the US Dollar and include AUD, CAD, CHF, EUR,
GBP, NOK, NZK, SEK and YEN. The ETCs also provide exposure to local interest rates in
addition to FX movements between the relevant Currency and US Dollars. The new Currency
ETCs will be fully collateralised in order to mitigate counter-party risk and will be listed in the
ETC segment of the LSE.
The new securities to be listed on the LSE are:
| Long Currency ETCs |
LSE Code |
| ETFS Long AUD Short USD |
LAUD |
| ETFS Long GBP Short USD |
LGBP |
| ETFS Long CAD Short USD |
LCAD |
| ETFS Long EUR Short USD |
LEUR |
| ETFS Long JPY Short USD |
LJPY |
| ETFS Long NZD Short USD |
LNZD |
| ETFS Long NOK Short USD |
LNOK |
| ETFS Long SEK Short USD |
LSEK |
| ETFS Long CHF Short USD |
LCHF |
| Short Currency ETCs |
LSE Code |
| ETFS Short AUD Long USD |
SAD |
| ETFS Short GBP Long USD |
SGBP |
| ETFS Short CAD Long USD |
SCAD |
| ETFS Short EUR Long USD |
SEUR |
| ETFS Short JPY Long USD |
SJPY |
| ETFS Short NZD Long USD |
SNZD |
| ETFS Short NOK Long USD |
SNOK |
| ETFS Short SEK Long USD |
SSEK |
| ETFS Short CHF Long USD |
SCHF |
Currency ETCs are intended for investors wishing to diversify their portfolio through the
addition of a new asset class which has a low correlation with equities and bonds, or for those
investors wanting to take advantage of tactical or strategic macro opportunities using the
foreign exchange market. The table below shows that the returns of most major market
currencies versus the US Dollar outperformed equities, bonds and real estate with lower
volatility. For example, the MSFX Long AUD Index outperformed UK equities by 13.4, 55.4
and 37.2 percentage points over one, three and five years respectively with approximately 5%
per annum of the total return over the five year period due to local Australian interest rates
which have been incorporated into the MSFX Currency Index.
| |
1Yr |
Returns*
3Yr |
5Yr |
Volatility
3Yr |
| MSFX Total Return Indices |
| Long Australian Dollar Index (TR) |
36.7% |
35.4% |
54.7% |
19.3% |
| Long British Pound Index (TR) |
0.8% |
-4.7% |
7.6% |
12.0% |
| Long Canadian Dollar Index (TR) |
11.9% |
11.5% |
27.9% |
13.3% |
| Long Euro Index (TR) |
15.0% |
23.6% |
28.2% |
11.1% |
| Long Japanese Yen Index (TR) |
8.7% |
28.3% |
15.0% |
13.2% |
| Long New Zealand Dollar Index (TR) |
25.9% |
29.1% |
43.8% |
18.1% |
| Long Norwegian Krone Index (TR) |
18.4% |
27.3% |
28.2% |
15.9% |
| Long Swedish Krona Index (TR) |
8.5% |
9.5% |
10.5% |
16.1% |
| Long Swiss Franc Index (TR) |
10.9% |
24.3% |
20.4% |
12.0% |
| Equity Indices |
| FTSE 100 |
23.3% |
-20.0% |
17.5% |
33.3% |
| Dow Jones Euro STOXX 50 |
26.1% |
-15.8% |
21.3% |
32.9% |
| Fixed Income Index |
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| US Tracker 1-10Yrs Bond Index |
5.3% |
21.3% |
26.4% |
4.8% |
| Real Estate Index |
| UK EPRA Real Estate |
-5.0% |
-66.4% |
-37.8% |
41.9% |
* USD returns, as at 30 October 2009
Source: Bloomberg; ETF Securities |
ETF Securities are launching the Currency ETC platform due to investor demand for secure,
transparent and liquid exchange traded products. With Commodity ETC assets having nearly
tripled in 2009 and volumes having doubled, it is clear that investors have widely accepted the
ETC structure as a vehicle of choice for exposure to commodities. This is now been extended
to include currencies.
Similar to Exchange Traded Funds (ETFs), ETCs are liquid, accessible and simple. ETCs can be
created and redeemed on a continuous basis by market makers, matching the tremendous
liquidity of the underlying foreign exchange markets and can be traded by investors on a
regulated exchange in the same way as any equity. Currency ETCs will provide accurate and
transparent currency exposure to recognised benchmarks in a single trade. In addition,
Currency ETCs require no foreign currency account and no trading or management of
futures/forward contracts as ETCs are simply priced off new currency indices published by
Morgan Stanley.
The Currency ETCs will track newly launched Morgan Stanley Foreign Exchange Indices
(MSFXSM Indices) and are designed to replicate a fully collateralised long or short investment
in one of the G10 currencies against the USD and also provide exposure to local interest rates.
The indices follow an objective and systematic methodology overseen by an index committee
and are based off publicly available data sources that reflect actual quotes / trades by market
participants.
Investors will be able to buy and sell the new ETCs on the London Stock Exchange, through
regulated brokers or ETF Securities’ network of approved market makers and authorised
participants. Currency ETCs will be traded with all the same order types available to equities,
including market, limit and stop orders. The minimum trade size is one security, settlement is
T+3 (trade date plus three business days) in CREST and each Currency ETC be subject to a
0.39% p.a. management charge.
Nik Bienkowski, Chief Operating Officer, commenting on this innovative launch said:
“Our investors have demanded access to new asset classes in a liquid and secure package.
Currency ETCs will deliver this through an open-ended exchange traded security which is fully
collateralised and available through ordinary brokerage accounts. After the events of the past
year, transparency and security have been demanded by our investors and as a result of the
ETC structure, assets in our Commodity ETC platform have increased by over $9 billion this
year to reach $15 billion with recent weekly trading volumes of $1.4 billion.”
“ETF Securities’ Currency ETC platform provides 18 long and short Collateralised Currency
Securities with exposure to G-10 currencies. Currencies have been one of the best performing
asset classes, along with commodities, over the past 1 year, 3 years and 5 years. Currencies
also have low correlation to other asset classes and low volatility, making currencies an asset
which can improve portfolio performance through increased diversification. Currencies are the
most liquid class available while Currency ETCs also provide access to local interest rates,
which have averaged around 5% per annum over the past five years in the case of the
Australian Dollar.”
For further information, please contact:
Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com
ETF Securities Conference Call: Access the Global FX Market with Currency ETCs
Date: 11th Nov 2009
Time: 11:00am and 3:00pm London Time
Nicholas Brooks, Head of Research and Investment Strategy, ETF Securities Ltd
This call will discuss:
- New Currency ETCs & MSFXSM Currency Indices
- Investment Case for Currencies
- Currencies as an Asset Class
- Low Correlation Provides Diversification Benefits
- Low Volatility Boosts Risk-Adjusted Returns
- Implement Strategic & Tactical Views with Currencies
- Liquidity Model & Pricing
To register your place today: www.etfsecurities.com/en/events/etfs_events_calls.asp
Notes to Editors:
ETF Securities is a provider of Exchange Traded Commodities (ETCs) and 3rd generation
Exchange Traded Funds (ETFs). The management of ETF Securities pioneered the
development of 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.
The Exchange Traded Products (ETPs) provide investors with a wide variety of investment
strategies, with ETPs offering resource equities, physical, long, forward, leveraged and short
exposure to all commodity sectors and now G10 Currencies.
ETPs are simple to access as they are traded in five currencies (EUR, USD, GBP, AUD and JPY)
and listed on nine major exchanges globally including the London Stock Exchange, the New
York Stock Exchange, the Tokyo Stock Exchange, NYSE-Euronext Paris, NYSE-Euronext
Amsterdam, Deutsche Börse, Borsa Italiana, the Australian Securities Exchange and the Irish
Stock Exchange.
To learn more about ETF Securities go to: www.etfsecurities.com
Disclaimer:
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 Foreign Exchange Limited, 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
Foreign Exchange Limited, 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.
Index disclaimer: The Morgan Stanley Indices are the exclusive property of Morgan Stanley & Co. Incorporated (“Morgan Stanley”). Morgan
Stanley and the Morgan Stanley index names are service mark(s) of Morgan Stanley or its affiliates and have been licensed for use for certain
purposes by the Issuer and ETF Securities Limited. The financial securities referred to herein are not sponsored, endorsed, or promoted by
Morgan Stanley, and Morgan Stanley bears no liability with respect to any such financial securities. The Prospectus contains a more detailed
description of the limited relationship Morgan Stanley has with the Issuer and any related financial securities. No purchaser, seller or holder of
this product, or any other person or entity, should use or refer to any Morgan Stanley trade name, trademark or service mark to sponsor,
endorse, market or promote this product without first contacting Morgan Stanley to determine whether Morgan Stanley’s permission is
required. Under no circumstances may any person or entity claim any affiliation with Morgan Stanley without the prior written permission of
Morgan Stanley.
ETF Securities Limited, ETFS Foreign Exchange Limited, ETFS Commodity Securities Limited, ETFS Metal Securities Limited, ETFS Oil
Securities Limited, and Gold Bullion Securities Limited are each regulated by the Jersey Financial Services Commission. ETFS Fund Company
PLC is regulated by the Financial Regulator in Ireland.
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