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Oil ETC innovator ETF Securities extends world’s largest oil ETC
platform with launch of ETFS Forward Crude Oil
- ETFS Forward Crude Oil (“FCRU”) will track the DJ-UBS Crude Oil 3 Month Forward
Sub-IndexSM
- The index has historically outperformed other enhanced oil indices over different
time periods
- ETFS Forward Crude Oil will complement world’s largest oil ETC platform of 14 oil
ETCs
- ETF Securities’ oil ETC platform hits $10bn of exchange traded volume for 2009 as
oil ETC assets reach $1.4bn
London, 10/11/2009, ETF Securities (ETFS), the award winning* oil ETC pioneer and global
pioneer in Exchange Traded Commodities (Commodity ETCs) and 3rd generation Exchange
Traded Funds (ETFs) will expand its oil ETC offering with the listing of ETF Forward Crude Oil
(FCRU) later this week on the London Stock Exchange (LSE).
ETFS created the world’s first oil ETC with Shell Trading in July 2005. More than four years later,
the ETFS oil ETC platform now enables investors to invest in oil through long, short, forward
(from front month to 3 years) and leveraged ETCs, and to choose which part of the oil futures
curve they would like exposure to. Investors also have the choice of being exposed to either ICE
Futures’ Brent or NYMEX’s WTI, the world’s two most traded oil benchmarks. In addition,
investors are able to gain exposure to oil equities through the ETFX Dow Jones STOXX 600 Oil &
Gas Fund (OILG). ETFS launched the world’s first Commodity ETC platform in Europe between
2003 and 2006 accumulating over $15.8 billion in assets as of 9th November 2009.
ETFS Forward Crude Oil (FCRU) will track the DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM,
completing ETF Securities’ oil ETC platform of 14 oil ETCs. With 14 oil ETCs, ETF Securities has
the world’s largest oil ETC platform and with $1.4bn assets and $220m of average weekly
trading volume in oil ETCs since the beginning of the year (approx $10bn year-to-date), it
provides investors with the largest choice and highest trading liquidity in oil ETCs in Europe.
ETFS Crude Oil (CRUD), ETFS Brent 1mth (OILB) and ETFS Leveraged Crude Oil (CRUD) have
consistently been in the top 10 traded ETCs/ETFs on the LSE over the past year.
| ETC |
LSE Code |
Exposure |
| ETFS Crude Oil |
CRUD |
DJ-UBS Crude Oil Sub-IndexSM |
| ETFS Forward Crude Oil |
FCRU |
DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM |
| ETFS Short Crude Oil |
SOIL |
-100% of the daily % change in the DJ-UBS Crude Oil Sub-IndexSM |
| ETFS Leverage Crude Oil |
LOIL |
200% of the daily % change in the DJ-UBS Crude Oil Sub-IndexSM |
| ETFS Brent 1mth |
OILB |
ICE Futures’ Brent oil 1st or 2nd month futures contract |
| ETFS Brent 1mth £* |
OLBP |
ICE Futures’ Brent oil 1st or 2nd month futures contract |
| ETFS Brent 1 yr |
OSB1 |
ICE Futures’ Brent oil contracts with an average maturity of approx. 1 yr |
| ETFS Brent 2 yr |
OSB2 |
ICE Futures’ Brent oil contracts with an average maturity of approx. 2 yrs |
| ETFS Brent 3 yr |
OSB3 |
ICE Futures’ Brent oil contracts with an average maturity of approx. 3 yrs |
| ETFS WTI 2 mth yr |
OILW |
NYMEX WTI oil 2nd or 3rd month futures contract |
| ETFS WTI 2 mth £* |
OLWP |
NYMEX WTI oil 2nd or 3rd month futures contract |
| ETFS WTI 1 yr |
OSW1 |
NYMEX WTI oil contracts with an average maturity of approx. 1 yr |
| ETFS WTI 2 yr |
OSW2 |
NYMEX WTI oil contracts with an average maturity of approx. 2 yrs |
| ETFS WTI 3 yr |
OSW3 |
NYMEX WTI oil contracts with an average maturity of approx. 3 yrs |
The DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM is a passive oil index but has historically
performed remarkably well, outperforming most “enhanced” or “smart” indices over different
time periods. The DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM has returned 30.8% YTD and
24.4% per annum over the past 10 years, outperforming global equities by 2.4 and 25.9
percentage points respectively (as proxied by the MSCI World Index). The index follows a
transparent and simple methodology with no complex algorithms driving the roll strategy or
index composition; the index simply provides exposure to the DJ-UBS Crude Oil 3 Month
Forward Sub-IndexSM which rolls every two months between the 4th and 6th WTI oil futures
contract. Being exposed to WTI futures between the 4th and 6th months, the index may gain
when the futures curve is in “backwardation”** while cushioning the roll yield when the futures
curve is in “contango”**. It provides a good compromise between ETCs providing short dated
exposure exhibiting more short term price volatility due to news events, and longer dated ETCs
that may be less affected by the shape of the futures curve (contango / backwardation). With
this new ETC, ETFS’ oil ETC platform allows investors to choose how they wish to achieve their
oil exposure, rather than an algorithm choosing for them.
ETFS Forward Crude Oil (FCRU) will be listed in the ETC segment of the London Stock Exchange.
FCRU and will be subject to a 0.49% p.a. management charge. All ETCs tracking DJ-UBS
Commodity IndicesSM are fully collateralised in order to mitigate counter-party risk using ETF
Securities’ standard requirements for eligible collateral assets which requires between 100% to
110% coverage of the outstanding value. The trading in this new oil ETC is expected to begin on
Thursday 12th November 2009 on the LSE.
Nicholas Brooks, Head of Research and Investment Strategy, commented:
“The DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM is a passive oil index which has performed
remarkably well, rising 30.8% YTD and 24.4% per annum over the past 10 years, outperforming
global equities and most “smart” algorithm-driven oil indexes over various time periods. After
falling sharply last year, oil prices have rebounded strongly this year as cyclical indicators have
picked up and inventories have declined. While the rally has reduced the impact of contango on
futures returns, it remains a drag on near-dated oil futures”.
“The DJ-UBS Crude Oil 3 Month Forward Sub-IndexSM helps investors minimize their exposure to
contango by giving them direct exposure to futures returns further along the oil curve. The new
ETC will complement our wide range of existing oil ETCs that give investors’ exposure to oil
futures returns ranging from 1 month to 3 years in both WTI and Brent oil.”
Nik Bienkowski, Chief Operating Officer, commenting on this innovative launch said:
"Our investors have demanded access to commodities in a liquid and secure package. Oil ETCs
deliver this through an open-ended exchange traded security which can be traded like any
equity. 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 Oil ETC platform have increased to
$1.4 billion this year with oil ETC trading volumes of $10 billion in the year to date.”
“With the success of oil ETCs and investors’ increasing knowledge of oil and commodity markets,
our clients have demanded access to long, short and leveraged oil ETCs across different
maturities. ETFS Forward Crude Oil now completes this platform of 14 ETCs, with an offering of
oil ETCs for almost any situation”.
For further information, please contact:
Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com
*Awards
- Awarded 'Most Innovative ETF Hybrid Product Award for Europe 2006', 2007' & 2008' as
voted by the readers of exchangetradedfunds.com
- Awarded 'Most Innovative Product 2006 & 2007' as voted by the editors of Investors
Chronicle (UK)
- Awarded 'Most Innovative ETF 2005 - OILB' as voted by the readers of
exchangetradedfunds.com
**'Backwardation' and 'contango' – definitions:
Backwardation refers to a downward sloping forward curve (as in an inverted yield curve) or,
more formally, it is the situation where, and the amount by which, the price of a commodity for
future delivery is lower than the spot price, or a far future delivery price lower than a nearer
future delivery.
Contango is the opposite to 'backwardation' and refers to an upward sloping forward curve (as in
the normal yield curve) in prices or, more formally, it is the situation where, and the amount by
which, the price of a commodity for future delivery is higher than the spot price, or a far future
delivery price higher than a nearer future delivery.
Notes to Editors:
ETF Securities is a provider of Exchange Traded Products (3rd Generation ETFs, Commodity ETCs
and Currency ETCs). 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.
“None of the index providers of the relevant ETFs referred to herein nor their licensors make any warranty or representation whatsoever either
as to the results obtained from use of the relevant indices and/or the figures at which such indices stand at any particular day or otherwise.
None of the index providers shall be liable to any person for any errors or significant delays in the relevant indices nor shall be under any
obligation to advise any person of any error or significant delay therein.” “Dow Jones,” “UBS”, DJ-UBSCISM,”, “DJ-UBSCI-F3SM,” and any related
Indices or Sub-Indices are service marks of Dow Jones & Company, Inc. (“Dow Jones”) and UBS AG (“UBS”), as the case may be, and have been
licensed for use by the Issuer. The Securities although based on components of the Dow Jones UBS Commodity Index 3 month Forward SM
(formerly known as the Dow Jones –AIG Commodity Index 3 Month Forwards SM) are not sponsored, endorsed, sold or promoted by Dow Jones,
UBS, or any of their respective subsidiaries or affiliates, and none of Dow Jones, UBS, or any of their respective subsidiaries or affiliates, makes
any representation regarding the advisability of investing in such product. ETF Securities Limited and each Issuer are regulated by the Jersey
Financial Services Commission.
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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