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ETF Exchange (ETFX) announces the launch of the world’s first third generation ETF platform today
21/12/09
- Confirmed participants on the platform: BofA Merrill Lynch, Citi, and Rabobank International.
- Issuing 3rd generation ETFs pioneered by ETF Securities.
- ETFX offers a total of 21 equity ETFs comprising Europe’s first platform of resource-equity ETFs and double leveraged (2x) and double short (-2x) ETFs.
- Resource-equity related ETFs show strong performance this year, with ETFX Russell Global Coal Mining Fund up over 126% YTD.
- Equity AUM growth up over 65% in three months to over $320m.
ETF Securities Ltd (ETFS), the global pioneers in Exchange Traded Commodities (ETCs) and independent provider of Exchange Traded Funds (ETFs), is pleased to announce the launch of the ETF Exchange (Europe) (ETFX), the world’s first third generation ETF platform. ETF Securities is initially working with BofA Merrill Lynch, Citi, and Rabobank International who are participants on the platform, acting as distribution partners, authorised participants and swap providers, with scope to add additional participants in the future.
The vision for 3rd generation ETFs was pioneered by ETF Securities. The idea was inspired by investor demands for increased levels of transparency, liquidity and counterparty risk management. ETF Securities identified that the current ETF issuance model by single financial institutions could be strengthened by diversifying index replication across a consortium of the strongest financial players and concentrating liquidity within a single platform issued by an independent ETF issuer.
ETFX offers a total of 21 equity ETFs comprising Europe’s first ETF platform concentrating on resource-equity ETFs and double leveraged (2x) and double short (-2x) ETFs. These ETFs are listed across 5 European exchanges (the London Stock Exchange, Deutsche Borse, NYSE-Euronext Amsterdam, the Borsa Italiana and the Irish Stock Exchange) and traded in up to 3 currencies (USD, EUR and GBP). They are part of the ETF Exchange initiative driven by client demand for increased liquidity, innovative products and reduced credit risks and counter-party exposure. The ETFs are all swap-backed ETFs using multiple counterparties, allowing more efficient tracking, with collateral being held in excess of UCITS1. This issuance model is arguably amongst the most efficient and risk averse available today.
The ETFX equity ETF platform has seen strong trading growth since the introduction of thematic ETFs in the fourth quarter of 2008, and 2x short and 2x leveraged equity ETFs at the end of the second quarter 2009. Basic resource themed ETFs have seen particularly strong returns, led by a 126% YTD increase in the ETFX Russell Global Coal Mining Fund (COAL) and a 100% YTD rise in the ETFX Dow Jones STOXX 600 Basic Resources Fund (BRES)2. ETFX ETFs now have over $320 million AUM, up over 65% in the past three months.
Commenting on the launch of the ETF Exchange (Europe), Mark Weeks, the CEO of ETF Exchange, said: “This is an important milestone in the development of ETF Exchange. Working with banks of this calibre will provide investors with an unparalleled quality of service, across an innovative range of products. The ETFX platform is truly market-changing. We believe the evolution of ETFX will make redundant the current single bank issuance models.”
1 Undertakings for Collective Investment in Transferable Securities
2 Based on return information sourced by ETF Securities using data obtained from Bloomberg, as at 11/12/2009
For further information, please contact:
Nicolas Rajner
Tel: +44 (0) 20 7448 4330
Email: nicolas.rajner@etfsecurities.com
Notes to Editors:
BofA Merrill Lynch
Bank of America Merrill Lynch, which is the marketing name for the global banking and global markets business of Bank of America Corporation, is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. With offices in more than 40 countries and territories, the combined company serves corporate and institutional clients in 150 countries worldwide. Our equity markets professionals provide a full range of equity and equity-linked sales and trading services, including sophisticated portfolio analytics and electronic trading.
Citi
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com
Rabobank Group
Rabobank Group is a Netherlands based, international financial services provider operating on the basis of cooperative principles with a predominant focus on providing allfinanz services in the domestic market. Internationally the Group’s focus is on food and agriculture. In line with its cooperative roots, Rabobank Group is a cooperative bank, comprised of independent local Rabobanks, plus their central organisation Rabobank Nederland and its (international) subsidiaries. The organisation has more than 60,000 employees worldwide and operates in 46 countries. Rabobank Group has the highest credit rating, Triple A, awarded by international rating agencies including Standard & Poor's and Moody’s. In terms of Tier I capital, the organisation is among the top 25 largest financial institutions in the world. Total assets amount to EUR 615 billion and a net profit to EUR 1.3 billion in the first half of 2009.
Internationally, the Rabobank Group operates specialized entities including De Lage Landen (leasing and vendor financing), Robeco Group (asset management), Rabo Real Estate Group (real estate management) and Sarasin (private banking).
For more information about the Rabobank Group go to www.rabobank.com.
ETF Securities
ETF Securities is a provider of Exchange Traded Commodities (Commodity ETCs), Exchange Traded Currencies (Currency 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 ETC platform which was first listed on the London Stock Exchange in September 2006.
ETFS Exchange Traded Products (ETPs) provide investors with a wide variety of investment strategies, with ETPs offering exposure to resource equities, physical, long, forward, leveraged and short exposure to all commodity sectors and G10 Currencies.
ETPs are simple to access as they are traded in up to five currencies (EUR, USD, GBP, AUD and JPY) and listed on up to 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.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR TO THE GENERAL PUBLIC IN THE UNITED KINGDOM OR JERSEY. THIS PRESS RELEASE IS NOT A PROSPECTUS BUT AN ADVERTISEMENT AND INVESTORS SHOULD NOT SUBSCRIBE FOR ANY TRANSFERABLE SECURITIES REFERRED TO IN THIS PRESS RELEASE EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS
This press release has been issued by ETF Securities Limited (ETFS), which is regulated by the Jersey Financial Services Commission, for journalists in the United Kingdom. ETF Exchange (Europe) Limited is currently a wholly owned subsidiary of ETFS.
This press release appears as a matter of record only and does not constitute an offer to sell or an invitation to purchase any securities.
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.
None of, BofA Merrill Lynch, Citi, or Rabobank International accept any responsibility or liability for the content of this press communication.
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