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ETF Securities’ resources equity ETF surges 20% as investors move into resource-related equities and hard assets
11/02/09
- Resource equities are the best performing sector last week, year to date, and over 3 months
- Returns of cyclical sectors continue to rebound as Steel, Coal and Shipping ETFs returned an average of 12.2% last week
- Coal equities outperformed other energy companies, returning 8.5% last week
- ETFS Russell Global Gold Mining Fund (AUCO) outperformed the gold price by 200% over the past 3 months
- Investors continue to search for security in the shape of collateralised investments and Exchange Traded Funds (ETFs)
ETF Securities has seen strong returns in its new platform of commodity-related equity ETFs in recent weeks, highlighting a broad pattern of strength across commodities and commodity equities as investors increasingly seek out hard assets and the companies that produce them. Average returns for ETF Securities’ commodity-related ETFs have risen by 32.1% since 20 November 2008. 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, AUM has grown above $30 million since its recent launch. ETF Securities is the global pioneer in commodities with $9bn invested in commodities directly through Exchange Traded Commodities (ETCs).
The ETFS Dow Jones Stoxx 600 Basic Resources Mining Fund (BRES) - which tracks the performance of the largest European companies engaged in the basic resources sector - posted a remarkable performance last week rising by 20.1%. BRES has risen a total of 34.3% since 20 November 2008, substantially outperforming most benchmark equity indexes and asset classes. Despite commodity prices falling, supply side risks remain as many major capital expenditure plans have been scrapped. Since October 2008, over $106bn of investment cuts or delays have been reported by the oil majors alone.
Despite the current economic downturn, companies sensitive to the economic cycle such as steel companies also gained last week with the ETFS Russell Global Large Cap Steel (STLL) rising by 13.8%, bringing total returns since 20 November 2008 to 47%. Steel companies appear to be benefiting from signs of increased demand in China demand and the general perception that steel stocks were already discounting an extremely severe and prolonged economic downturn. This also applies to the shipping sector; shipping has started to perform as highlighted in ETF Securities’ recent report Shipping Stocks: Time for a Bounce? The ETFS Russell Global Large Cap Shipping Fund (SHIP) surged 10.8% last week bringing total returns over the past two weeks to 13.8%. Historically SHIP has had a strong positive correlation to the Baltic Dry Index however, with the Baltic Dry Index up 144.7% since 8 December 2008 and SHIP up only 11.3%, SHIP equities appears to be trading at a discount.
On a similar theme, the ETFS Russell Global Coal Fund (COAL) posted the strongest rise amongst energy equity ETFs, up 12.1% over the week. As a key input in steel production, the bounce in Chinese manufacturing activity has also added further impetus to COAL equities. COAL has risen 57.9% since 20 November 2008, making it the second best performing equity ETF in ETF Securities’ ETF platform. COAL equities have outperformed all other energy related equities- the ETFS Dow Jones STOXX 600 Oil & Gas Fund (OILG) returned 6.6% and the ETFS DAXGlobal Alternative Energy (ALTE) Fund returned 1.9% last week.
The strongest performing equity ETF over the past few months has been the ETFS Russell Global Gold Mining Fund (AUCO), up 4% last week and 95.5% since 28 October 2008. Over the past three months AUCO has outperformed the gold price by 200%. AUCO continues to benefit from investors increasingly bullish view on the gold price and gold miners ability to leverage on these gains.
In terms of broader equity benchmarks, investors appear to be maintaining a relatively conservative stance, favouring highly liquid large cap funds such as the ETFS Russell 1000 Fund (RONE) versus small cap higher growth funds such as the ETFS Russell 2000 Fund (RTWO).
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, ETF assets and ETF trading volumes are rising contrary to other investment products.
ETF Securities has now expanded the reach of its platform of equity index tracking Exchange Traded Funds (ETF) on European Exchanges with the registration of its platform in France following the existing listings on the Irish Stock Exchange, the London Stock Exchange, NYSE-Euronext, Deustche Boerse and Borsa Italiana. 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:
“The performance of resource-related equity ETFs has been gaining momentum recently. Commodity equities have been the best performing sector this year and for the past three months. The Dow Jones Stoxx 600 Basic Resources Fund (BRES) posted a remarkable performance last week rising by 20.1%. BRES has risen a total of 34.3% since 20 November 2008, substantially outperforming most benchmark equity indexes and asset classes. Other cyclically-oriented equity ETFs have also performed very strongly with the ETFS Russell Global Large Cap Steel Fund (STLL) up 47% since 20 November 2008 and ETFS Russell Global Coal Fund Fund (COAL) up 57.9%. Gold has been the top performing equity ETF with the ETFS Russell Global Gold Mining Fund (AUCO) up 95.5% since the end of October.”
“The strong rise in resource-related equity ETFs appears to be related to recent data indicating that the extreme pessimism towards global manufacturing and resource demand – particularly from China – may have been overdone, and the substantial discounts of many resource equities to commodity prices.”
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:
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 Investment
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: “WNASM”, “WNA NUCLEAR ENERGY INDEXSM” are service marks of the World Nuclear Association and have been licensed for use by WNA Global Indexes, LLC and have been further licensed for use by ETF Securities Limited. The Product(s) is/are not sponsored, endorsed, sold or promoted by either WNA Global Indexes, LLC, the World Nuclear Association, or S-Network Global Indexes, LLC each of which make no representation regarding the advisability of investing in the Product(s).
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: “JANNEYSM”, “JANNEY GLOBAL WATER INDEXSM” are service marks of the Janney Montgomery Scott and have been licensed for use by J-Net Global Indexes, LLC and have been further licensed for use by ETF Securities Limited. The Product(s) is/are not sponsored, endorsed, sold or promoted by either J-Net Global Indexes, LLC, the Janney Montgomery Scott, or S-Network Global Indexes, LLC each of which make no representation regarding the advisability of investing in the Product(s).
Index Disclaimers: The ETFS DAXglobal Alternative Energy Fund is neither sponsored nor promoted, distributed or in any other manner supported by Deutsche Börse AG (the “Licensor”). The Licensor does not give any explicit or implicit warranty or representation, neither regarding the results deriving from the use of the DAXglobal® Alternative Energy Index and/or the term DAXglobal® (the “Index Trademark”) nor regarding the DAXglobal® Alternative Energy Index value at a certain point in time or on a certain date nor in any other respect. The DAXglobal® Alternative Energy Index is calculated and published by the Licensor. Nevertheless, as far as admissible under statutory law the Licensor will not be liable vis-à-vis third parties for potential errors in the DAXglobal® Alternative Energy Index. Moreover, there is no obligation for the Licensor vis-à-vis third parties, including investors, to point out potential errors in the DAXglobal® Alternative Energy Index. Neither the publication of the DAXglobal® Alternative Energy Index by the Licensor nor the granting of a license to the Company’s Promoter regarding the DAXglobal® Alternative Energy Index as well as the Index Trademark for the utilisation in connection with the ETFS DAXglobal Alternative Energy Fund, which is derived from the DAXglobal® Alternative Energy Index, represents a recommendation by the Licensor for a capital investment or contains in any manner a warranty or opinion by the Licensor with respect to the attractiveness on an investment in the ETFS DAXglobal Alternative Energy Fund. In its capacity as sole owner of all rights to the DAXglobal® Alternative Energy Index and the Index Trademark the Licensor has solely licensed to the Promoter of the ETFS DAXglobal Alternative Energy Fund the utilisation of the DAXglobal® Alternative Energy Index and the Index Trademark as well as any reference to the DAXglobal® Alternative Energy Index and the Index Trademark in connection with the ETFS DAXglobal Alternative Energy Fund. A list of all Funds of the Company currently authorised by the Financial Regulator is contained in the Fund Schedule Supplement.
Index Disclaimers: Neither STOXX Limited (“STOXX”) nor Dow Jones & Company, Inc. (“Dow Jones”), has any relationship to the Company, other than the licensing of the Dow Jones STOXX 600 Basic Resources Index, Dow Jones STOXX 600 Oil & Gas Index, Dow Jones STOXX 600 Utilities Index and the related trademarks for use in connection with the ETFS STOXX 600 Basic Resources Fund, ETFS STOXX 600 Oil & Gas Fund, ETFS STOXX 600 Utilities Fund.
STOXX and Dow Jones do not:
- Sponsor, endorse, sell or promote the ETFS STOXX 600 Basic Resources Fund; ETFS STOXX 600 Oil & Gas Fund; ETFS STOXX 600 Utilities Fund;
- Recommend that any person invest in the ETFS STOXX 600 Basic Resources Fund, ETFS STOXX 600 Oil & Gas Fund; ETFS STOXX 600 Utilities Fund or any other securities;
- Have any responsibility or liability for or make any decisions about the timing, amount or pricing of the ETFS STOXX 600 Basic Resources Fund; ETFS STOXX 600 Oil & Gas Fund; ETFS STOXX 600 Utilities Fund;
- Have any responsibility or liability for the administration, management or marketing of the ETFS STOXX 600 Basic Resources Fund; ETFS STOXX 600 Oil & Gas Fund; ETFS STOXX 600 Utilities Fund;
- Consider the needs of the ETFS STOXX 600 Basic Resources Fund, ETFS STOXX 600 Oil & Gas Fund; ETFS STOXX 600 Utilities Fund or the owners of the ETFS STOXX 600 Basic Resources Fund, ETFS STOXX 600 Oil & Gas Fund; ETFS STOXX 600 Utilities Fund in determining, composing or calculating the Dow Jones STOXX 600 Basic Resources Index, Dow Jones STOXX 600 Oil & Gas Index, Dow Jones STOXX 600 Utilities Index or have any obligation to do so.
STOXX AND DOW JONES WILL NOT HAVE ANY LIABILITY IN CONNECTION WITH THE ETFS STOXX 600 BASIC RESOURCES FUND, ETFS STOXX 600 OIL & GAS FUND; ETFS STOXX 600 UTILITIES FUND. SPECIFICALLY, STOXX AND DOW JONES MAKE NO WARRANTY, EXPRESS OR IMPLIED AND DISCLAIM ANY AND ALL WARRANTY ABOUT THE RESULTS TO BE OBTAINED BY THE ETFS STOXX 600 BASIC RESOURCES FUND, THE COMPANY OR ANY OTHER PERSON IN CONNECTION WITH THE USE OF THE DOW JONES STOXX 600 BASIC RESOURCES INDEX, AND THE DATA INCLUDED IN THE DOW JONES STOXX 600 BASIC RESOURCES INDEX; ,DOW JONES STOXX 600 OIL & GAS INDEX, DOW JONES STOXX 600 UTILITIES INDEX; THE ACCURACY OR COMPLETENESS OF THE DOW JONES STOXX 600 BASIC RESOURCES INDEX, ,DOW JONES STOXX 600 OIL & GAS INDEX, DOW JONES STOXX 600 UTILITIES INDEX AND ITS DATA; THE MERCHANTABILITY AND THE FITNESS FOR A PARTICULAR PURPOSE OR USE OF THE DOW JONES STOXX 600 BASIC RESOURCES INDEX, DOW JONES STOXX 600 OIL & GAS INDEX, DOW JONES STOXX 600 UTILITIES INDEX AND ITS DATA; STOXX AND DOW JONES WILL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS IN THE DOW JONES STOXX 600 BASIC RESOURCES INDEX, ,DOW JONES STOXX 600 OIL & GAS INDEX, DOW JONES STOXX 600 UTILITIES INDEX OR ITS DATA; UNDER NO CIRCUMSTANCES WILL STOXX OR DOW JONES BE LIABLE FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF STOXX OR DOW JONES KNOWS THAT THEY MIGHT OCCUR. THE LICENSING AGREEMENT BETWEEN THE PROMOTER AND STOXX IS SOLELY FOR THEIR BENEFIT AND NOT FOR THE BENEFIT OF SHAREHOLDERS OR ANY OTHER THIRD PARTIES. A list of all Funds of the Company currently authorised by the Financial Regulator is contained in the Fund Schedule Supplement.
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 Servcies Commission
To obtain a copy of the prospectus please visit the website at www.etfsecurities.com
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