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ETF Securities list 29 Short ETCs on the
London Stock Exchange
26/02/08
- 10 Short Index ETCs and 19 Short Individual ETCs list in
London’s Exchange Traded Commodities segment
ETF Securities, the global pioneer of exchange traded commodities (ETCs) will
add to its ETC platform with the introduction of 29 Short ETCs today. The Short
ETCs will complement ETF Securities’ existing 55 Classic and Forward ETCs which
already provide investors long exposure to the commodities market.
The Short ETCs to be listed on the London Stock Exchange today will provide
investors access to a wide range of investment and trading strategies. The 29
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.
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.
The ETC platform offered by ETF Securities has experienced massive growth in
the past ten weeks with assets growing by 100% to over $4.3 billion and daily
trading volumes doubling to over $100 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.
ETFS Short ETCs to be listed are:
| Short Individual ETCs |
LSE Code |
Short Index ETCs |
LSE Code |
| ETFS Short Aluminium |
SALU |
ETFS Short All Commodities DJ-AIGCISM |
SALL |
| ETFS Short Coffee |
SCFE |
ETFS Short Agriculture DJ-AIGCISM |
SAGR |
| ETFS Short Copper |
SCOP |
ETFS Short Energy DJ-AIGCISM |
SNRG |
| ETFS Short Corn |
SCOR |
ETFS Short Ex-Energy DJ-AIGCISM |
SNEY |
| ETFS Short Cotton |
SCTO |
ETFS Short Grains DJ-AIGCISM |
SGRA |
| ETFS Short Crude Oil |
SOIL |
ETFS Short Industrial Metals DJ-AIGCISM |
SIME |
| ETFS Short Gasoline |
SGAS |
ETFS Short Livestock DJ-AIGCISM |
SLST |
| ETFS Short Gold |
SBUL |
ETFS Short Petroleum DJ-AIGCISM |
SPET |
| ETFS Short Heating Oil |
SHEA |
ETFS Short Precious Metals DJ-AIGCISM |
SPMT |
| ETFS Short Lean Hogs |
SLHO |
ETFS Short Softs DJ-AIGCISM |
SSFT |
| ETFS Short Live Cattle |
SLCT |
ETFS Short Natural Gas |
SNGA |
| ETFS Short Nickel |
SNIK |
ETFS Short Silver |
SSIL |
| ETFS Short Soybean Oil |
SSYO |
ETFS Short Soybeans |
SSOB |
| ETFS Short Sugar |
SSUG |
ETFS Short Wheat |
SWEA |
| ETFS Short Zinc |
SZIC |
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Four new commodities will also be added in the coming weeks: 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.
In addition to their obvious benefits, Short 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 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 ETCs are priced off the same underlying
markets as the existing ETCs, this implies that the liquidity of Short ETCs will also
be similar. In addition to liquidity on five European stock exchanges, ETF
Securities can issue $250 million of additional new Short 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.
33 Leveraged ETCs are also to be listed in the coming weeks. The Leveraged
ETCs will 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).
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 Short ETCs commence on the London Stock Exchange today.
Commenting on the listing of 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 Physical, 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 ten weeks there has been a huge surge in global demand for ETCs
and we recently passed the landmark of $4 billion invested in our existing
offering. Over this period, assets and trading volumes are up over 100%. With
listings on five of Europe’s major exchanges ETF Securities has successfully
delivered simple, cost-efficient and accessible products for all investors.”
Commenting on the launch Pietro Poletto, Head of ETF and ETC Markets
at London Stock Exchange Group, said:
“These new Short ETCs are a very welcome new addition to our markets, and
with the forthcoming Leveraged ETCs will take the number of trading products
available on our Exchange Traded Commodities market segment to well over
100.
“As well as being able to access a broad range of commodities, including for the
first time Cocoa, Lead and Tin, investors will now have a simple way to gain
short and leveraged ETC exposure, putting some of the types of trading
strategies at use in the equities markets at their fingertips.
I am sure that this additional flexibility will contribute to the growth in our
dedicated Exchange Traded Commodities segment, which has started the year
very strongly, with £1.3 billion worth of trading in January, nearly double the
previous monthly record”
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:
Introduction of Short and Leveraged ETCs
6 March 2008, 11:00am or 15:00pm London Time
For more information
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 advertisement 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 relevant 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. Commodity Securities have not been
and will not be registered under the US Securities Act or any other applicable law of the United States.
Commodity 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. Commodity Securities 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
Commodity Securities held by that Security Holder in accordance with the provisions described in the
Prospectus. Commodity 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 Commodity Securities held by that Security Holder in accordance with the
provisions described in the 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 will be licensed
for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related or other
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, 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 relevant prospectus please visit the website at
www.etfsecurities.com
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