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ETF Securities’ gold equity fund Rises 90% as investors seek hard asset and value equity plays through collateralised investment vehicles
05/02/09
- ETF Securities’ platform of commodity-related equity ETFs shows strong returns as investors build positions in hard assets and commodity-related equities
- Gold and Agri-business equities outperform market - ETFS Russell Global Gold Fund (AUCO) up 90% & ETFS S-Net ITG Global Agri Business Fund (AGRI) up 18% since end of 2008
- ETF Securities’ lists Europe’s first Shipping ETF (SHIP) as Baltic Dry Index rises a record 15% yesterday
- ETF Securities’ equity ETF platform continues to expand in Europe with new listings on Deutsche Borse and Borsa Italiana
ETF Securities has seen strong outperformance in a number of recently listed commodity-themed equity ETFs. These ETFs are UCITS III equity funds tracking companies in a range of global commodity sectors including coal, shipping and agri-business. The new ETF platform is a world first for exposure to such a wide range of thematic global commodity sectors in the one ETF platform, and as a result, has taken in approximately $30 million since its recent launch. ETF Securities is the global pioneer in commodities with nearly $9bn invested in commodities directly through ETCs.
The ETFS Russell Global Gold Fund (AUCO) which tracks global gold mining companies has been the best performing ETF, rising by 90% since the 28 October 2008. This compares to a 22% rise in the gold price over the same period. Gold companies have benefitted from investors’ increasingly bullish view on the gold price, with gold companies providing leverage on further gold price gains. Even after recent increases, global gold companies are still trading at a discount to their levels versus the gold price.
Agriculture-related equities have also performed strongly with the ETFS S-Net ITG Global Agri Business Fund (AGRI) - which tracks the returns of globally listed companies involved in agriculture - up 18% since 5 December 2008 (a 110% annualized return). Investors appear to be attracted by agriculture’s defensive nature (agricultural prices tend to have a low correlation to the business cycle) and the agriculture sector’s relatively strong supply-demand fundamentals.
Yesterday, the Baltic Dry Index rose a record 15% in one day. It has been reported that the number of idle capesize ships fell to almost zero after being around 25% a couple of months ago. The ETFS Russell Global Shipping Fund (SHIP) shows a high positive correlation to the Baltic Dry Index. However the Baltic Dry Index is up 70% over the past month in contrast to SHIP which is down 10% as a result of the recent pressure on global equities.
Interestingly, a number of other ETFs exposed to growth themes also performed well last week, indicating that investors may see value in current valuations. The ETFS Russell Global Coal Fund (COAL) was up over 7% last week while the ETFS Russell Global Steel Large Cap Fund (STLL) rose 6.5%.
ETFs tracking the broad US equity market, the ETFS Russell 1000 Fund (RONE) and ETFS Russell 2000 Fund (RTWO) also saw a rebound last week, rising by 1.1% and 0.7% respectively. Historically the Russell 2000® - which provides exposure to US small cap equities - has seen the strongest returns versus major US equity markets indices when the business cycle turns up while the Russell 1000® – which tracks 90% of US large cap equities - tends to relatively outperform during downturns. ETF Securities is the first European issuer to list ETFs on both the Russell 1000® and Russell 2000® indices – being the two most tracked US equity indices.
Exchange Traded Funds (ETFs) are currently seeing renewed interest as investors seek protection through their investments from credit related risks. An ETF’s fund structure ensures that assets are segregated from the issuer, unlike many structured products which are usually unsecured debt from the issuer. ETFs provide investors with a liquid, transparent, collateralised and continuously traded investment solution. As a result, investors are now favoring ETFs when looking to get exposure to a particular market or sector that would otherwise be difficult or costly to access – ETF assets and ETF trading volumes are rising contrary to other investment products. ETF Securities’ innovative ETF fund structures are being generally accepted as a great improvement on the legacy single bank Issuer models that exist to date in Europe.
ETF Securities has now expanded the reach of its platform of equity index tracking Exchange Traded Funds (ETF) on European Exchanges with new listings on the Deutsche Borse and the Borsa Italiana, following the existing listings on the Irish Stock Exchange, the London Stock Exchange and NYSE-Euronext in 2008. The ETFs are now listed on 5 major European stock exchanges in dedicated ETF trading segments. The ETFs are traded in three currencies (USD, Euros and Sterling).
Commenting, Nicholas Brooks, Head of Research and Investment Strategy, at ETF Securities, said:
“Commodity-related equity ETFs have seen extremely strong performance recently as investors have increasingly focused on longer term fundamentals supporting commodity prices after extreme drops in the share prices of mining companies. The ETFS Russell Global Gold Fund (AUCO), which tracks global gold mining companies, has been the best performing ETF, rising 90% since the 28 October 2008. Even at current levels, it is trading at a discount relative to its historic relationship with the gold price.
“Shipping equities may also provide good value following their very severe drop over the past eight months. The ETFS Russell Global Shipping Fund (SHIP), which historically has had a high correlation to the Baltic Dry index, is down 10% over the past month while the Baltic Dry index has risen 70% over the same period. Yesterday alone the Baltic Dry index rose 15%, indicating that if this historical relationship holds there may be scope for a rebound in SHIP.”
For further information, please contact:
Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com
About ETF Securities new equity ETF platform
ETF Securities Equity ETF platform is the first in Europe to use a “third generation” ETF model using multiple and interchangeable swap counterparties for a more accurate and stable tracking of the index, and for full replication of index return. This structure helps mitigate risks (no reliance on a single swap provider) and provide enhanced liquidity (through market makers/swap providers competition) enabling investors to poll multiple market makers for best price and get true competition and arbitrage. This has been made possible thanks to ETF Securities independence from any multiservice financial institutions. ETF providers in Europe are mostly owned or tied to a single financial institution that provides them with the index exposure through single swap contracts.
ETF Securities continues its series of conference calls for finance professionals:
The Russell US Equity Indexes: The Russell 1000 and Russell 2000
Rolf Agather, Director of Research and Development, Russell Indexes
Date: 11th February 2009
Time: 15:00pm London Time
Third Generation ETFs' why ETF Securities equity ETFs are best of breed!
Hector McNeil, Managing Partner, ETF Securities Ltd
Date: 12th February 2009
Time: 11:00am and 15:00pm London Time
US Equity Markets Review: Expert review of the health of the US Equity Markets
Brian Tipple, Chief Investment Officer, EMEA and Equities, Russell Investments
Date: 24th February 2009
Time: 11:00am London Time
To register your place today:
www.etfsecurities.com/en/events/etfs_events_calls.asp
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 shares to be issued by ETFS Fund Company public limited company (“Shares”) 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 prospectus and the relevant sub-fund supplement (together the “Prospectus”) and recipients of this advertisement who are considering a purchase of Shares following distribution of the Prospectus in connection therewith are reminded that any such purchase should be made solely on the basis of the information contained in such Prospectus and any supplements thereto. This advertisement does not constitute any recommendation regarding the Shares of ETFS Fund Company public limited company.
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 Shares 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) must not be acted upon or relied upon by persons who are not relevant persons. 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 in, from or otherwise involving the United Kingdom.
This is not an offer of shares or securities for sale in the United States. The Shares have not been and will not be registered under the US Securities Act or any other applicable law of the United States. The Issuer has not been and does not intend to become registered as an investment company under the Investment Company Act and related rules. These Shares and any beneficial interest therein may not be reoffered, resold, pledged or otherwise transferred in the United States or to US persons. If the Issuer determines that any Shareholder is a US Person the Issuer may redeem the Shares held by that Shareholder in accordance with the provisions described in the Prospectus. The Shares may not be purchased by any ERISA Plan as more particularly described in the Prospectus and if the Issuer determines that any Shareholder is an ERISA Plan, the Issuer may redeem the Shares held by that Shareholder in accordance with the provisions described in the Prospectus relating to those Shares."
Index Disclaimers: "S-NETWORKSM”, “S-NETWORK ITGSM”, “S-NETWORK ITG AGRICULTURE INDEXSM”, are service marks of the S-Network Global Indexes, LLC and have been licensed for use by ETF Securities Limited. The Product(s) is/are not sponsored, endorsed, sold or promoted by S-Network Global Indexes, LLC which makes no representation regarding the advisability of investing in the Product(s).
Index Disclaimers: The ETFS Russell 1000® Fund, ETFS Russell 2000® Fund, ETFS Russell Global Coal Fund, ETFS Russell Global Gold Fund, ETFS Russell Global Shipping Large Cap Fund and the ETFS Russell Global Steel Large Cap Fund are not sponsored, endorsed, sold or promoted by Russell. Russell makes no representation or warranty, express or implied, to the Company or any member of the public regarding the advisability of investing in securities generally or in the ETFS Russell Index Funds particularly or the ability of the Russell Indexes to track general stock market performance or a segment of the same. Russell’s publication of the Russell Indexes in no way suggests or implies an opinion by Russell as to the advisability of investment in any or all of the securities upon which the Russell Indexes are based. Russell’s only relationship to the Company is the licensing of certain trademarks and trade names of Russell and of the Russell Indexes to the Company’s Promoter, which trademarks and trade names are determined, composed and calculated by Russell without regard to the ETFS Funds. Russell is not responsible for and has not reviewed the ETFS Funds nor any associated literature or publications and Russell makes no representation or warranty express or implied as to their accuracy or completeness, or otherwise. Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Russell Indexes. Russell has no obligation or liability in connection with the administration, marketing or trading of the ETFS Funds. RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RUSSELL 1000, RUSSELL 2000, RUSSELL GLOBAL COAL, RUSSELL GLOBAL GOLD, RUSSELL SHIPPING LARGE CAP OR THE RUSSELL GLOBAL STEEL LARGE CAP INDEXES OR ANY DATA INCLUDED THEREIN AND RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY INVESTORS, THE ETFS FUNDS, THE COMPANY, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RUSSELL INDEXES OR ANY DATA INCLUDED THEREIN. RUSSELL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE RUSSELL INDEXES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
ETF Securities Ltd 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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