ETF Securities launches ETFX DJ-UBS All Commodities Forward 3 Month Fund on the LSE

22/03/10

• World’s first ETF on the Dow Jones-UBS Commodity Index 3 Month Forward
  
  
• New fund based on the top performing DJ-UBSCI F3^SM Index which returned 263% over the past 10 years, making commodities the top performing major asset class over the period
  
  
• New fund provides high correlation with spot returns while reducing impact of roll yield
  
  
• New fund complements the existing ETC offering
  
  
• Trades and settles the same as an Equity on the London Stock Exchange

London, the 22nd March 2010 - ETF Securities (ETFS) listed on Thursday 18th March the world first ETF based on the Dow Jones – UBS Commodity 3 Month Forward^SM Index (DJUBSCI F3^SM). The new fund will be part of the ETF Exchange (Europe) platform. ETF Exchange is the world’s first 3rd generation ETF platform which is supported by Bank of America Merrill Lynch, Barclays Capital, Citi, and Rabobank International who are participants on the platform.

The increasing investor’s knowledge about commodities investing and demand for exposure to longer-dated commodity futures contracts has led ETF Securities to create ETFX DJ-UBS All Commodities Forward 3 Month Fund (COMF), providing investors with more choice and allowing them to implement different investment strategies in commodities. Due to the dynamic nature of the commodity futures curve investors wish to be able to track different commodity futures dependent on their views.

ETFX DJ-UBS All Commodities Forward 3 Month Fund (COMF) offer investors for the first time, the opportunity to gain direct and simple exposure to a diversified basket of 19 forward commodity futures prices represented in the DJ-UBSCI F3^SM Index, the index provide exposure to futures contracts three months ahead on the DJ-UBSCI^SM. The DJ-UBSCI F3^SM is arguably the best way to gain commodity exposure with economic significance due to its unique two third weighting to liquidity and one third to production.

The new ETF offering is extremely complementary to the existing ETC offering, as it will broaden commodity investing to a wider range of investors across Europe. Together, the platform of ETCs and ETFs enable investors to implement a wide variety of investment strategies including physical, long, forward, leveraged and short exposure to all commodity sectors.



Research shows that the DJ-UBSCI F3^SM historically exhibited high correlation with spot returns while reducing impact of roll yield, as the shape of the futures curves can vary widely over time and this can have an important impact on investor’s returns. The short end of the curve tends to be more strongly affected by contango/backwardation, whereas longer-dated futures are less affected and tend to be driven more by perceptions of long term structural supply, demand and cost issues which tend to change more slowly. Commodities were the best performing major asset class over the past 10 years to December 2009, with DJ-UBSCI F3^SM Index rising by 263%, compared to a 2% rise in the EuroSTOXX 50, a 9% rise in the FTSE 100, a 7% rise in property¹ and 71% return on bonds². This outperformance was achieved with lower average annual volatility than equities over the same period³.

Commenting on this innovative product launch, Mark Weeks, the CEO of ETF Exchange, said: “We continue to strive to deliver innovative solutions that meet the needs of our clients, and which challenge more traditional products. In the ETFX DJUBSCI F3, I believe we’ve achieved that”

Michael A. Petronella, President, Dow Jones Indexes, said: “As commodities investing has become more and more popular and diversified in the past years, market participants increasingly seek innovative indexing tools. The Dow Jones-UBS Commodity Forward Indexes provide superior and reliable performance measurement of longer-dated commodities futures contracts. We remain committed to deliver leading-edge indexing for this continuously evolving, exciting asset class.”

Pietro Poletto, Head of ETFs and ETCs at London Stock Exchange Group, said: "We are pleased to welcome this new ETF to our markets today. Encompassing both the London Stock Exchange and Borsa Italiana, London Stock Exchange Group is the leading ETF exchange in Europe. This latest addition to the UK market will offer those trading on our London markets even greater diversity in their choice of investment."

For further information, please contact:

Nicolas Rajner
Tel: +44 (0) 20 7448 4330
Email: nicolas.rajner@etfsecurities.com

Notes to Editors:

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.

Barclays Capital

Barclays Capital is the investment banking division of Barclays Bank PLC. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with a comprehensive set of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs over 20,000 people and has the global reach, advisory services and distribution power to meet the needs of issuers and investors worldwide. For further information about Barclays Capital, please visit our website: www.barclayscapital.com.

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, NYSEEuronext Paris, NYSE-Euronext Amsterdam, Deutsche Börse, Borsa Italiana, the Australian Securities Exchange and the Irish Stock Exchange.

ETFX now offers a total of 22 ETFs comprising Europe’s first complete platforms of resource-equity ETFs and double leveraged (2x) and double short (-2x) ETFs. These ETFs are listed on up to 5 European exchanges (the London Stock Exchange, Deutsche Borse, Euronext Paris, Euronext Amsterdam and the Borsa Italiana) 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 UCITS guidelines. This issuance model is arguably the most efficient and risk averse available today.

The vision for third 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. Under the current ETF issuance model, if the sponsoring / issuing financial institution fails, it is highly likely that their respective ETFs would be greatly disrupted and potentially liquidated.

¹ Property: Proxied by the UK EPRA Real Estate Index
² Bonds: Proxied by US Tracker 1-10Yrs Bond Index
³ Calculated using the annual volatility of daily returns from 31st December 1999 to 31st December 2009

To learn more about ETF Securities go to: www.etfsecurities.com

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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.

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