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Platinum and Precious Metal ETCs continue to Shine in
January
05/02/08
- ETFS Precious Metal ETCs grow to $1.5 billion
- ETFS Physical Platinum experiences record growth, up $95m or
40% last week
- Platinum held by ETF Securities represents 5% of annual
production on an annualised basis
- Precious Metal ETC volumes up 250% to $280m per week
ETF Securities Limited, the global pioneer of exchange traded commodities
(ETCs), has seen total Assets Under Management (AUM) grow in the past month
by 32% to over $3.3 billion. Last week alone, ETF Securities experienced a record
breaking month for AUM growth of $800 million. This demand has been a result
of investors wanting to diversify their investment portfolio into other asset classes
which exhibit low correlation to equities and bonds.
Precious metal ETCs have now accumulated over $1.5 billion of assets, with most
of these assets having been accumulated since May 2007. In the past month,
precious metal ETC assets have increased by $330 million or 28%. ETFS Physical
Platinum (PHPT) and ETFS Physical Gold (PHAU) have contributed nearly $250
million of these new assets with platinum breaking all records.
The increase in assets has occurred on the back of volatile equity and bond
markets, with the major equity markets falling by 5% to 10% in January. This
volatility has in turn caused a flight to non-correlated assets such as precious
metals. During this period, precious metals have outperformed, experiencing
returns of 8% to 16%.
Most recently, ETFS Physical Platinum experienced a huge amount of interest with
assets growing by $95 million last week. ETFS Physical Platinum is now the
largest platinum ETC in the world with over $330 million in assets. Including
ETFS Physical PM Basket which consists of a 21% allocation to platinum, ETF
Securities now holds over 210,000 ounces of physical platinum. On an
annualised basis, this represents nearly 5% of annual new mine production.
Similar to the highly successful gold ETCs whose combined bullion holdings ranks
5th amongst the world’s central banks, ETFS Physical Platinum is liquid and
transparent and is accessible to all investor types.
All physical precious metal ETCs are backed by physical, allocated metal -
uniquely identifiable bars which carry no bank credit risk. The precious metal
bars and ingots are held in trust in London by the Custodian HSBC Bank USA
N.A., who is the world's leading Custodian for ETCs. The metal held with the
Custodian must conform to the rules for Good Delivery of the London Bullion
Market Association (LBMA) and London Platinum Palladium Market (LPPM). ETCs
are only issued once metal is confirmed as being deposited into the Issuer’s
bullion account with the Custodian.
Weekly ETC trading volumes have also exploded to $450 million, up over 150%
since December. Of this, precious metal ETC trading has increased from $80
million per week to $280 million last week, an increase of 250% over the past
month. In addition to market conditions which are supportive of precious metals,
the increase in trading volumes is also a result of multiple European listings
complemented with the largest number of Authorised Participants and market
makers of any ETC or ETF (Exchange Traded Fund). Last week, 62% of ETC
trading volume was due to precious metal ETCs.
In addition to gaining un-leveraged short exposure to precious metals, soon
investors will have the option to gain short or leveraged exposure through an
offering of 66 Short and Leveraged ETCs. 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.
Commenting on the response of investors for ETF Securities’ precious
metal ETCs, Nik Bienkowski, Head of Listings and Research, said:
“There has been a significant increase in demand for ETCs linked to the price of
commodities and particularly precious metals. Most recently, this demand has
been for platinum and gold ETCs as investors seek to diversify their portfolios
away from equities and bonds and into other asset classes.
“Given the current market uncertainty regarding the banking sector, we have
seen strong inflows into physically-backed precious metal ETCs which have grown
25% in January. In addition, increasing demand and stagnant supply, coupled
with the recent power shortages in South Africa, the world’s largest producer of
platinium, helped ETFS Physical Platinum to break its AUM and trading volume
records last week.
“Overall there has been a huge surge in global demand for ETCs. $35 billion has
been in invested in ETCs over the last three years, with approximately 70% ($25
billion) invested in precious metals.”
For further information, please contact:
Roman Townsend
Penrose Financial
Tel: +44 (0) 20 7786 4875
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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