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ETF Securities to launch entire range of ETCs providing 33
types of both Short and Leveraged Exposure
31/01/08
- World first for listed access to an entire platform of Short &
Leveraged commodity indices via ETCs
- 66 new ETCs to be listed making a total of over 110 ETCs
available
- 4 New ETCs, Cocoa, Lead, Tin & Platinum based on the
DJ-AIG Commodity Index
ETF Securities, the global pioneer of exchange traded commodities (ETCs) will
add to its ETC platform with the introduction of 33 Short ETCs and 33 Leveraged
ETCs. The Short and Leveraged ETCs will complement ETF Securities’ existing 51
Classic and Forward ETCs which already provide investors long exposure to
different parts of the futures curve.
The 66 new ETCs are all priced off indices and sub-indices of the Dow Jones – AIG
Commodities IndexSM. As with the existing Classic and Forward ETCs, these new
ETCs will comprise 19 individual commodities and 9 sub-indices. In addition, four
new commodities will be added: Cocoa, Lead, Tin and Platinum. With the new
ETCs, ETF Securities will have created over 110 ETCs providing long, short and
leveraged exposure to the world’s major commodity markets.
The new ETCs are expected to be listed on the London Stock Exchange in the
next few weeks and will provide investors access to a wide range of investment
and trading strategies. Short ETCs will enable investors to gain from falls in
commodity prices. Leveraged ETCs will enable investors to gain from rising
commodity prices, providing exposure with 50% less capital.
The ETC platform offered by ETF Securities has experienced massive growth in
the past eight weeks with assets growing by 50% to over $3.2 billion and daily
trading volumes doubling to almost $80 million per day across five European
exchanges. The increase in assets has occurred as a result of increased
awareness of commodities and ETCs, volatile equity markets creating demand for
non-correlated assets, positive commodity fundamentals, inflation fears and
annual portfolio rebalancings made at the start of the new year.
Short and Leveraged ETCs will be made available on the following Dow Jones –
AIG Commodity Indices consisting of 23 individual commodity indices and
10 composite commodity indices:
The 20 new Short and Leveraged Index Securities are:
| ETC Short Name |
LSE Code |
|
ETC Leveraged Name |
LSE Code |
| ETFS Short All Commodities DJ-AIGCISM |
SALL |
|
ETFS Leveraged All Commodities DJ-AIGCISM |
LALL |
| ETFS Short Agriculture DJ-AIGCISM |
SAGR |
ETFS Leveraged Agriculture DJ-AIGCISM |
LAGR |
| ETFS Short Energy DJ-AIGCISM |
SNRG |
ETFS Leveraged Energy DJ-AIGCISM |
LNRG |
| ETFS Short Ex-Energy DJ-AIGCISM |
SNEY |
ETFS Leveraged Ex-Energy DJ-AIGCISM |
LNEY |
| ETFS Short Grains DJ-AIGCISM |
SGRA |
ETFS Leveraged Grains DJ-AIGCISM |
LGRA |
| ETFS Short Industrial Metals DJ-AIGCISM |
SIME |
ETFS Leveraged Industrial Metal DJ-AIGCISM |
LIME |
| ETFS Short Livestock DJ-AIGCISM |
SLST |
ETFS Leveraged Livestock DJ-AIGCISM |
LLST |
| ETFS Short Petroleum DJ-AIGCISM |
SPET |
ETFS Leveraged Petroleum DJ-AIGCISM |
LPET |
| ETFS Short Precious Metals DJ-AIGCISM |
SPMT |
ETFS Leveraged Precious Metals DJ-AIGCISM |
LPMT |
| ETFS Short Softs DJ-AIGCISM |
SSFT |
ETFS Leveraged Softs DJ-AIGCISM |
LSFT |
The 46 new Short and Leveraged Individual Securities are:
| ETC Short Name |
LSE Code |
|
ETC Leveraged Name |
LSE Code |
| ETFS Short AluminiumSM |
SALU |
|
ETFS Leveraged AluminiumSM |
LALU |
| ETFS Short Cocoa |
SCOC |
ETFS Leveraged Cocoa |
LCOC |
| ETFS Short Coffee |
SCFE |
ETFS Leveraged Coffee |
LCFE |
| ETFS Short Copper |
SCOP |
ETFS Leveraged Copper |
LCOP |
| EETFS Short Corn |
SCOR |
ETFS Leveraged Corn |
LCOR |
| ETFS Short Cotton |
SCTO |
ETFS Leveraged Cotton |
LCTO |
| ETFS Short Crude Oil |
SOIL |
ETFS Leveraged Crude Oil |
LOIL |
| ETFS Short Gasoline |
SGAS |
ETFS Leveraged Gasoline |
LGAS |
| ETFS Short Gold |
SBUL |
ETFS Leveraged Gold |
LBUL |
| ETFS Short Heating Oil |
SHEA |
ETFS Leveraged Heating Oil |
LHEA |
| ETFS Short Lead |
SLEA |
ETFS Leveraged Lead |
LLEA |
| ETFS Short Lean Hogs |
SLHO |
ETFS Leveraged Lean Hogs |
LLHO |
| ETFS Short Live Cattle |
SLCT |
ETFS Leveraged Live Cattle |
LLCT |
| ETFS Short Natural Gas |
SNGA |
ETFS Leveraged Natural Gas |
LNGA |
| ETFS Short Nickel |
SNIK |
ETFS Leveraged Nickel |
LNIK |
| ETFS Short Platinum |
SPLA |
ETFS Leveraged Platinum |
LPLA |
| ETFS Short Silver |
SSIL |
ETFS Leveraged Silver |
LSIL |
| ETFS Short Soybean Oil |
SSYO |
ETFS Leveraged Soybean Oil |
LSYO |
| ETFS Short Soybeans |
SSOB |
ETFS Leveraged Soybeans |
LSOB |
| ETFS Short Sugar |
SSUG |
ETFS Leveraged Sugar |
LSUG |
| ETFS Short Tin |
STIM |
ETFS Leveraged Tin |
LTIM |
| ETFS Short Wheat |
SWEA |
ETFS Leveraged Wheat |
LWEA |
| ETFS Short Zinc |
SZIC |
ETFS Leveraged Zinc |
LZIC |
Short ETCs allow investors to earn a positive return even when the index is
falling. Short ETCs earn minus one times (-1x) the daily change in the index
(before fees and interest). For example, if the underlying index falls by 2% in a
day, a Short ETC will increase by 2% and vice versa. Until now, it has been
difficult for investors to benefit from falling prices as to go short, investors would
have had to borrow ETCs and then sell those ETCs in the market-both of which
was difficult and relatively expensive. Additionally, shorting exposed investors to
unlimited losses but the new short ETCs limit the maximum loss to the investors’
initial investment.
Leveraged ETCs allow investors to earn a positive return when the index is rising
with 50% less capital. Leveraged ETCs earn two times (+2x) the daily change in
the index (before fees and interest). For example, if the underlying index rises by
2% in a day, a Leveraged ETC will increase by 4% and vice versa. In today’s
market where it is increasingly difficult to obtain credit and margin, Leveraged
ETCs free up additional capital for investor’s to gain additional portfolio
diversification.
In addition to their obvious benefits, Short and Leveraged ETCs provide investors
with a wider range of investment strategies including: pairs trades when an
investor has a view that one commodity will rise or fall in price relative to another
commodity; reducing or increasing commodity price risk where a portfolio owns
commodity companies; and investment strategies which exploit the shape of a
commodity futures curve allowing investors to “short” the part of the curve in
contango and to go “long” the part of the curve in backwardation.
Short and Leveraged ETCs also offer the same benefits as the existing ETCs. They
are simple to trade on a major stock exchange, they can be settled and held in
ordinary brokerage accounts, they are transparent and have a clear pricing
formula. In addition, ETCs are highly liquid with multiple market makers providing
liquidity and continuous pricing. Since Short and Leveraged ETCs are priced off
the same underlying markets as the existing ETCs, this implies that the liquidity
of Short and Leveraged ETCs will also be similar. In addition to liquidity on five
European stock exchanges, ETF Securities can create $500 million of additional
Short and Leveraged ETCs each day. In total, ETF Securities can create over
$1 billion of new ETCs on a daily basis across its range of over 110 ETCs. The
minimum investment is one ETC.
In total, ETF Securities now offer platforms of physically backed precious metal
ETCs and Classic, Forward, Short and Leveraged ETCs providing exposure to
energy, agriculture, livestock, industrial metals and precious metals. The ETCs
have been listed on five major European stock exchanges in dedicated ETC
trading segments.
First dealings in the Short and Leveraged ETCs are expected to commence on the
London Stock Exchange in the next few weeks.
Commenting on launching another world first, Graham Tuckwell,
Chairman of ETF Securities, said:
“ETF Securities is synonymous with exchange traded commodities (ETCs). By
offering a full platform of ETCs, investors can now utilise ETCs for almost any
commodity investment and trading strategy. The new Short and Leveraged ETCs
will complement the existing ETCs which provide unleveraged long exposure
through Classic and Forward ETCs. Now investors can take advantage of rising or
falling commodity prices in addition to choice of ETCs along each commodity
futures curve.
“We have seen unrivalled support and demand for ETCs. Investors are now
realising that commodities can offer benefits to a portfolio due to their low
correlation to equities. In times of economic or financial upheaval, many
independent studies have shown that commodities can benefit a portfolio by
lowering volatility and/or increasing returns.
“Over the past eight weeks there has been a huge surge in global demand for
ETCs and we recently passed the landmark of $3 billion invested in our existing
offering. Over this period, assets and trading volumes are up over 50%. With
listings on five of Europe’s major exchanges ETF Securities has successfully
delivered simple, cost-efficient and accessible products for all investors.”
* ‘Backwardation’ and ‘contango’ – definitions:
Backwardation refers to a downward sloping forward curve (as in an inverted
yield curve) or, more formally, it is the situation where, and the amount by
which, the price of a commodity for future delivery is lower than the spot price, or
a far future delivery price lower than a nearer future delivery.
Contango is the opposite to ‘backwardation’ and refers to an upward sloping
forward curve (as in the normal yield curve) in prices or, more formally, it is the
situation where, and the amount by which, the price of a commodity for future
delivery is higher than the spot price, or a far future delivery price higher than a
nearer future delivery.
Risk warning: Investment in Short and Leveraged Commodity Securities involve
additional risks to those associated with the Issuer’s existing Commodity
Securities offering. Your particular attention is referred to the Risks and Warnings
Section of the Short and Leveraged Commodity Securities Prospectus.
For further information, please contact:
Roman Townsend
Penrose Financial
Tel: +44 (0) 20 7786 4875
ETF Securities continues its series of conference calls for finance
professionals:
A review of Agriculture Exchange Traded Commodities including inflows
and performance
30 January 2008, 11:00am or 15:00pm London Time
For more information
http://www.etfsecurities.com/en/events/etfs_events_calls.asp
Introduction of Short ETCs
20 February 2008, 11:00am or 15:00pm or London Time
For more information
http://www.etfsecurities.com/en/events/etfs_events_calls.asp
Introduction of Leverage ETCs
6 March 2008, 11:00am or 15:00pm or London Time
For more information
http://www.etfsecurities.com/en/events/etfs_events_calls.asp
Notes to editors:
The management of ETF Securities Limited pioneered the development of
Exchange Traded Commodities (ETCs), in 2003. Building on its success ETF
Securities created the world’s first entire ETC platform which was listed on the
London Stock Exchange in September 2006. Since then, ETF Securities has listed
its ETCs on Europe’s major exchanges (Frankfurt, Paris, Amsterdam and Italy)
with each exchange creating a separate ETC segment. With Classic, Forward,
Short and Leveraged ETCs available, investors can execute most trading and
investment strategies previously not possible.
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 transferable securities to be issued by ETFS
Commodity Securities Limited or any other 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
recipients of this advertisement who are considering a purchase of securities 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 supplementary prospectus(es).
This advertisement does not constitute any recommendation regarding the securities of ETFS
Commodity Securities Limited.
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 ETCs 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 ETCs) 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 ETCs in, from or otherwise involving the United Kingdom.
This is not an offer of securities for sale in the United States. Securities issued by Commodity
Securities Limited (“ Securities”) have not been and will not be registered under the US Securities Act
or any other applicable law of the United States. These 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. The Issuer has not been and does not intend to become
registered as an investment company under the Investment Company Act and related rules.
TheseSecurities 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 Security Holder 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 Securities held by that Security Holder in
accordance with the provisions described in the Prospectus. The Securities may not 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 held by that Security Holder in
accordance with the provisions described in the Prospectus relating to those Securities."
“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 will be licensed
for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related subindices
(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, AIGFP,
American International Group, or any of their respective subsidiaries or affiliates, makes any
representation regarding the advisability of investing in such product(s).
To obtain a copy of the prospectus please visit the website at
www.etfsecurities.com
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