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ETC Inflows surge, as commodities post their biggest monthly gain since 1991
03/06/09
- ETC Inflows rose by $228mn last week, with total flows reaching $3.4bn YTD, 13% higher than the same period last year
- Physically-backed precious metals ETCs accumulated $150mn last week and $1.4bn since the 1st January with gold backed ETCs adding 1.6m ounces to reach a record 7.6m ounces
- ETFS Natural Gas (NGAS), ETFS Copper (COPA) and ETFS Industrial Metals DJ-UBSCISM (AIGI) reached record AUM levels
- Commodity related equities also performed strongly with ETFS Russell Global Coal fund (COAL) up 93.4% in the last 3 months
- ETF Securities’ AUM at all time high above $12bn
ETF Securities, the global pioneer of Exchange Traded Commodities (ETCs), and provider of Exchange Traded Funds (ETFs), has seen continued strong inflows into ETCs. Last week ETC inflows rose at their fastest pace in nearly three months with $228mn flowing into a wide range of ETCs including precious metal ETCs, agriculture ETCs and diversified ETCs. Net inflows into ETCs this year is 13% higher than at the same time last year when the commodities bull market was in full swing. Inflows total $3.4bn while assets under management (AUM) has topped $12bn.
Last month, the DJ-UBSCI All Commodities IndexSM posted its biggest monthly gain since 1991 (when historical data begun), rising by 13% as the falling US dollar boosted demand for hard assets as a hedge against inflation. ETFS Physical Gold (PHAU) rose 10.4%, while the strongest performers in May were ETFS Crude Oil (CRUD) up 26.8%, and ETFS Gasoline (UGAS) up 28.7%.
The inflows are due to the growing concerns about the rapidly deteriorating sovereign credit outlook, inflation and financial stability as a result of aggressive quantitative easing being implemented by major central banks.
ETF Securities recorded major inflows of $150mn into precious metals last week with $111mn into the physically backed gold ETCs: ETFS Physical Gold (PHAU) and Gold Bullion Securities (GBS). ETFS Physical PM Basket (PHPM), which tracks a basket of precious metals, recorded its second largest weekly inflow ever with $23m. ETFS Platinum (PHPT) gathered $14mn last week. Trading volumes of ETF Securities’ gold ETCs have also been very strong with $266m traded last week and $8.1bn YTD or an average of $73m per day.
Following precious metals, ETFS Natural Gas (NGAS) has seen the strongest investor interest recently. Last week there were $35mn of net inflows into NGAS, bringing total inflows in the month of May to $113mn, the largest monthly increase since NGAS was first listed in September 2006. ETFS Leveraged Natural Gas (LNGA) has seen a surge of inflows recently. LNGA inflows rose by $19.7mn last week, more than net inflows YTD, making LNGA the leveraged ETC with the most inflows this year after ETFS Leveraged Crude Oil (LOIL).
Three ETCs reached record AUM levels at the end of May: ETFS Natural Gas (NGAS) assets now stand at a record $150m, ETFS Copper (COPA) reached $42m and ETFS Industrial Metals DJ-UBSCISM $98m.
ETFS Agriculture (AIGA) has also seen strong investor interest with $32mn of net inflows last week, bringing total inflows this year to $290mn, behind only gold and oil. Among the ETCs tracking individual agricultural commodities, last week ETFS Corn (CORN) and ETFS Sugar (SUGA) were the most popular.
Commodity-related equities which currently offer the only access to underlying commodities such as coal, steel or water in a tradeable security, have also experienced extremely strong performances with equity ETFs such as ETFS Russell Global Coal Fund (COAL - which tracks companies engaged in the global coal industry), up 34.1% in May and 93.4% in the last 3 months and ETFS Russell Global Steel Large Cap Fund (STLL – which tracks steel related companies) rising 27.7% in May and 77% in the last three months. These two funds outperformed the MSCI World Index respectively by 63% and 47% since the end of February 2009.
ETF Securities now offers more than 140 ETCs & ETFs with over $12 billion in assets. The ETCs & ETFs provide investors with a wide variety of investment strategies, with ETCs offering physical, long, forward, leveraged and short exposure to all major commodity sectors. ETCs are simple to access as they are traded in four currencies (EUR, USD, GBP and AUD) and listed on six major exchanges globally including the London Stock Exchange, NYSE-Euronext Paris, NYSE-Euronext Amsterdam, Deutsche Börse, Borsa Italiana, the Irish Stock Exchange and the Australian Securities Exchange.
Nicholas Brooks, Head of Research and Investment Strategy commented:
“The strong rally in commodity prices and flows into exchange traded commodities has coincided with a rise in a wide variety of global cyclical indicators and a general improvement in investor sentiment. It is interesting to note however, that inflows into ETCs have been building since last November, well before the recent rally, indicating that the surge in demand for commodities is being driven by more than just cyclical factors.”
“Growing investor concerns that the sharp rise in major country debt levels and aggressive quantitative easing will impact sovereign ratings, currency values and potentially cause inflation to rise sharply appears to be causing investors to raise their holdings of hard assets. In addition, current long-term supply-demand fundamentals and portfolio diversification benefits are bringing long-term investors into commodities. ETFS Physical Gold (PHAU) has seen particularly strong demand, though more recently ETFS All Commodities (AIGC), ETFS Agriculture (AIGA), ETFS Industrial Metals (AIGI) and ETFS Natural Gas (NGAS) have seen increasing inflows, indicating investors are broadening, as well as deepening, their exposure to the commodities markets.”
For further information, please contact:
Laura Stevens
Tel: +44 (0) 20 7448 4351
Email: laura.stevens@etfsecurities.com
Notes to Editors:
ETF Securities Ltd is a provider of Exchange Traded Commodities (ETCs) and Exchange Traded Funds (ETFs). ETF Securities is independently owned is the European market leader in ETCs. The management of ETF Securities pioneered the development 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.
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 securities (together the "Securities")of ETFS Commodity Securities Limited, ETFS Metal Securities Limited or ETFS Oil Securities Limited 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 Commodity Securities Limited, ETFS Metal Securities Limited, ETFS Oil Securities Limited 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.
"Dow Jones," "AIG®" "Dow Jones-AIG Commodity IndexSM," "DJ-AIGCISM", "Dow Jones-AIG Commodity 3-Month Forward Index" are service marks of Dow Jones & Company, Inc. and American International Group, Inc. ("American International Group"), as the case may be, and are licensed for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related sub-indices (including single commodity sub-indices) or 3-Month Forward Indexes are not sponsored, endorsed, sold or promoted by Dow Jones, AIG Financial Products Corp. ("AIG-FP"), American International Group, or any of their respective subsidiaries or affiliates, and none of Dow Jones, AIG-FP, American International Group, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product(s).
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.
Index Disclaimers: ETFS Russell Global Coal 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 Limited, ETFS Commodity Securities Limited, ETFS Metal Securities Limited, ETFS Oil Securities Limited, Gold Bullion Securities Limited are each 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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