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About ETFs and ETCs
Overivew  |  About ETFs  |  About ETCs  

Introducing ETCs

Investment objective ETCs track commodities - not commodity companies - and enable investors to gain exposure to commodities without trading futures or taking physical delivery
Type of security Secured, undated, zero-coupon note
Market makers More Information
Issue size ETCs are open-ended
Current offering
  • Gold Bullion Securities - World's first ETC backed by physical bullion (first issued in 2003)
  • ETFS Oil Securities - ETCs tracking oil futures returns and Europe's first Carbon ETC (first issued in 2005 and 2008)
  • ETFS Commodity Securities - World's first ETC platform:
    • Classic ETCs tracking the DJ-AIGCISM (first issued in 2006)
    • Forward ETCs tracking the DJ-AIGCI-F3SM (first issued in 2007)
    • Inverse ETCs tracking the DJ-AIGCISM (first issued in 2008)
    • Leveraged ETCs tracking the DJ-AIGCISM (first issued in 2008)
  • ETFS Metal Securities - ETCs tracking physical precious metal stored in HSBC's bullion vault (first issued in 2007)


    • Benefits of ETCs

    Accurate ETCs accurately track the underlying commodity index or individual commodity
    Liquid ETCs are open-ended securities, and therefore are not limited to on-exchange volumes
    Accessible ETCs are traded and settled on regulated stock exchanges, the same as any equity, and can be purchased and held in ordinary brokerage or custodial accounts
    Simple ETCs do not involve any of the difficulties with buying and then managing a futures position (eg. worrying about margin calls, contracts expiring and rolling positions) or in buying and storing physical commodities
    Transparent ETC pricing is based on a transparent formula with the pricing updated daily on the ETF Securities website
    Guaranteed pricing ETCs are priced using published settlement prices (rather than "best-efforts" pricing)
    Flexible Investors can go long or short ETCs, and they are lendable and marginable
    Proven record ETCs are managed by the same team which created the world's first exchange traded commodity; this team has over 4 years experience in developing commodity-backed investments


    Total Return

    Total Return is not applicable to the ETFS (Physical) Metal Securities. The return on ETFS (Physical) Metal Securities is based only on the Spot Return as these securities are backed by physical metal.

    ETCs that provide investors with a total return on commodity indices and individual commodities (including Oil Securities and Commodity Securities) consist of the following three sources of return:

    Spot return Changes in price of the front month ("spot") futures contract
    Roll return Gain or loss from rolling long futures positions prior to expiry
    Collateral return Interest earned on the cash value of the initial investment

    Click here to view the Total Return Fact Sheet


    NB: Data is from the London Stock Exchange's SEDOL Masterfile.




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