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ETF Securities lists Europe’s first and world’s largest Exchange Traded Currency platform
- 18 Currency ETCs providing long or short exposure to G-10 currencies
- First time an FX platform can be traded on a European stock exchange
- Includes exposure to local interest rates
- Fully collateralised
- Exposure to world’s most liquid asset class which has outperformed equities over 1yr, 3yrs and 5yrs
London, 16/11/2009 - ETF Securities (ETFS), the global pioneer in Exchange Traded Commodities (Commodity ETCs) and 3rd generation Exchange Traded Funds (ETFs) has launched the world’s largest and Europe’s first Exchange Traded Currency (Currency ETCs) platform with trading expected to begin next week. Currencies are the most liquid asset class with over $3.2 trillion of trading each day yet it is one of the last asset classes to be packaged in the form of an exchange traded product with 12th November 2009 marking the first day FX could be traded on the London Stock Exchange (LSE). ETF Securities is a pioneer of ETCs having launched the world’s first Commodity ETC platform in Europe between 2003 and 2006 and which now has accumulated over $16 billion in assets and recent trading of approximately $1.4 billion per week.
The first 18 Currency ETCs listed on the London Stock Exchange (LSE) on the 12th November track the recently launched MSFX Currency IndicesSM. The initial Currency ETCs provide long or short passive exposure to G10 currencies versus the US Dollar and include AUD, CAD, CHF, EUR, GBP, JPY, NOK, NZK and SEK. The ETCs also provide exposure to local interest rates in addition to FX movements between the relevant Currency and US Dollars. The new Currency ETCs are fully collateralised in order to mitigate counter-party risk and listed in the ETC segment of the LSE.
The new securities listed on the LSE are:
| Long Currency ETCs |
LSE Code |
| ETFS Long AUD Short USD |
LAUD |
| ETFS Long GBP Short USD |
LGBP |
| ETFS Long CAD Short USD |
LCAD |
| ETFS Long EUR Short USD |
LEUR |
| ETFS Long JPY Short USD |
LJPY |
| ETFS Long NZD Short USD |
LNZD |
| ETFS Long NOK Short USD |
LNOK |
| ETFS Long SEK Short USD |
LSEK |
| ETFS Long CHF Short USD |
LCHF |
| Short Currency ETCs |
LSE Code |
| ETFS Short AUD Long USD |
SAD |
| ETFS Short GBP Long USD |
SGBP |
| ETFS Short CAD Long USD |
SCAD |
| ETFS Short EUR Long USD |
SEUR |
| ETFS Short JPY Long USD |
SJPY |
| ETFS Short NZD Long USD |
SNZD |
| ETFS Short NOK Long USD |
SNOK |
| ETFS Short SEK Long USD |
SSEK |
| ETFS Short CHF Long USD |
SCHF |
Currency ETCs are intended for investors wishing to diversify their portfolio through the addition of a new asset class which has a low correlation with equities and bonds, or for those investors wanting to take advantage of tactical or strategic macro opportunities using the foreign exchange market. The table below shows that the returns of most major market currencies versus the US Dollar outperformed equities, bonds and real estate with lower volatility. For example, the MSFX Long AUD Index outperformed UK equities by 13.4, 55.4 and 37.2 percentage points over one, three and five years respectively with approximately 4.8% per annum of the total return over the five year period due to local Australian interest rates which have been incorporated into the MSFX Currency Index.
| |
1Yr |
Returns*
3Yr |
5Yr |
Volatility
3Yr |
| MSFX Total Return Indices |
| Long Australian Dollar Index (TR) |
36.7% |
35.4% |
54.7% |
19.3% |
| Long British Pound Index (TR) |
0.8% |
-4.7% |
7.6% |
12.0% |
| Long Canadian Dollar Index (TR) |
11.9% |
11.5% |
27.9% |
13.3% |
| Long Euro Index (TR) |
15.0% |
23.6% |
28.2% |
11.1% |
| Long Japanese Yen Index (TR) |
8.7% |
28.3% |
15.0% |
13.2% |
| Long New Zealand Dollar Index (TR) |
25.9% |
29.1% |
43.8% |
18.1% |
| Long Norwegian Krone Index (TR) |
18.4% |
27.3% |
28.2% |
15.9% |
| Long Swedish Krona Index (TR) |
8.5% |
9.5% |
10.5% |
16.1% |
| Long Swiss Franc Index (TR) |
10.9% |
24.3% |
20.4% |
12.0% |
| Equity Indices |
| FTSE 100 |
23.3% |
-20.0% |
17.5% |
33.3% |
| Dow Jones Euro STOXX 50 |
26.1% |
-15.8% |
21.3% |
32.9% |
| Fixed Income Index |
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| US Tracker 1-10Yrs Bond Index |
5.3% |
21.3% |
26.4% |
4.8% |
| Real Estate Index |
| UK EPRA Real Estate |
-5.0% |
-66.4% |
-37.8% |
41.9% |
* USD returns, as at 30 October 2009
Source: Bloomberg; ETF Securities |
ETF Securities has launched the Currency ETC platform due to investor demand for secure, transparent and liquid exchange traded products. Currency ETCs are backed by eligible collateral to the value of at least 100% of the total value of all Currency ETCs outstanding and is held in a segregated custody account by BNY Mellon. The collateral is adjusted daily to ensure credit risk is minimised. Currency ETCs are backed by the same eligible collateral criteria as ETF Securities’ existing Commodity ETCs. With Commodity ETC assets having nearly tripled in 2009 and volumes having doubled, it is clear that investors have widely accepted the ETC structure as a secure vehicle of choice for exposure to commodities. As a result, this is now been extended to include currencies.
Similar to Exchange Traded Funds (ETFs), ETCs are liquid, accessible and simple. ETCs can be created and redeemed on a continuous basis by market makers, matching the tremendous liquidity of the underlying foreign exchange markets and can be traded by investors on a regulated exchange in the same way as any equity. Currency ETCs will provide accurate and transparent currency exposure to recognised benchmarks in a single trade. In addition, Currency ETCs require no foreign currency account and no trading or management of futures/forward contracts as ETCs are simply priced off new currency indices published by Morgan Stanley.
The Currency ETCs will track newly launched Morgan Stanley Foreign Exchange Indices (MSFXSM Indices) and are designed to replicate a fully collateralised long or short investment in one of the G10 currencies against the USD and also provide exposure to local interest rates. The indices follow an objective and systematic methodology overseen by an index committee and are based off publicly available data sources that reflect actual quotes / trades by market participants.
Currency ETCs will be traded with all the same order types available to equities, including market, limit and stop orders. The minimum trade size is one security, settlement is T+3 (trade date plus three business days) in CREST and each Currency ETC be subject to a 0.39% p.a. management charge.
Nik Bienkowski, Chief Operating Officer, commenting on this innovative launch said:
“ETF Securities is extremely proud to be able to offer this exciting platform of 18 Currency ETCs for the first time to UK and European investors. This broadens the asset classes ETF Securities offers to include currencies on top of equities and commodities.”
“Our investors have demanded access to new asset classes in a liquid and secure package. Currency ETCs will deliver this through an open-ended exchange traded security which is fully collateralised and available through ordinary brokerage accounts. After the events of the past year, transparency and security have been demanded by our investors and as a result of the ETC structure, assets in our Commodity ETC platform have increased by approximately $10 billion this year to reach $16 billion with recent weekly trading volumes of $1.4 billion.”
“ETF Securities’ Currency ETC platform provides 18 long and short Collateralised Currency Securities with exposure to G-10 currencies. Currencies have been one of the best performing asset classes, along with commodities, over the past 1 year, 3 years and 5 years. Currencies also have low correlation to other asset classes and low volatility, making currencies an asset which can improve portfolio performance through increased diversification. Currencies are the most liquid class available while Currency ETCs also provide access to local interest rates, which have averaged around 4.8% per annum over the past five years in the case of the Australian Dollar.”
For further information, please contact:
Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com
Launch Event:
ETF Securities & Morgan Stanley presents the launch of the world’s largest Exchange Traded Currency platform on London Stock Exchange
Date: Tuesday 8th December 2009
Time: 5:30pm - 8:00pm
Venue: London Stock Exchange
To register your place today: click here
Conference Call:
Access the Global FX Market with Currency ETCs
Date: 25th Nov 2009
Time: 11:00am and 3:00pm London Time
Nicholas Brooks, Head of Research and Investment Strategy, ETF Securities Ltd
This call will discuss:
- New Currency ETCs & MSFXSM Currency Indices
- Investment Case for Currencies
- Currencies as an Asset Class
- Low Correlation Provides Diversification Benefits
- Low Volatility Boosts Risk-Adjusted Returns
- Implement Strategic & Tactical Views with Currencies
- Liquidity Model & Pricing
To register your place today: click here
Notes to Editors:
ETF Securities is a provider of Exchange Traded Commodities (ETCs) and 3rd generation Exchange Traded Funds (ETFs). The management of ETF Securities pioneered the development of 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.
The Exchange Traded Products (ETPs) provide investors with a wide variety of investment strategies, with ETPs offering resource equities, physical, long, forward, leveraged and short exposure to all commodity sectors and now G10 Currencies.
ETPs are simple to access as they are traded in five currencies (EUR, USD, GBP, AUD and JPY) and listed on nine major exchanges globally including the London Stock Exchange, the New York Stock Exchange, the Tokyo Stock Exchange, NYSE-Euronext Paris, NYSE-Euronext Amsterdam, Deutsche Börse, Borsa Italiana, the Australian Securities Exchange and the Irish Stock Exchange.
To learn more about ETF Securities go to: www.etfsecurities.com
Disclaimer:
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 Foreign Exchange Limited, ETFS Commodity Securities Limited, ETFS Metal Securities Limited or ETFS Oil Securities Limited or any shares (the "Shares") of ETFS Fund Company public limited company (the "Fund") 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. Collateralised currency securities are complex, structured products involving a significant degree of risk and are not suitable or appropriate for all types of investor. They are aimed at sophisticated, professional and institutional investors and any other person wishing to invest must seek appropriate financial, tax and other advice from independent financial advisors with appropriate regulatory authorisation and qualifications.
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 Foreign Exchange Limited, ETFS Commodity Securities Limited, ETFS Metal Securities Limited, ETFS Oil Securities Limited and ETFS Fund Company public limited company (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.
Index disclaimer: The Morgan Stanley Indices are the exclusive property of Morgan Stanley & Co. Incorporated (“Morgan Stanley”). Morgan Stanley and the Morgan Stanley index names are service mark(s) of Morgan Stanley or its affiliates and have been licensed for use for certain purposes by the Issuer and ETF Securities Limited. The financial securities referred to herein are not sponsored, endorsed, or promoted by Morgan Stanley, and Morgan Stanley bears no liability with respect to any such financial securities. The Prospectus contains a more detailed description of the limited relationship Morgan Stanley has with the Issuer and any related financial securities. No purchaser, seller or holder of this product, or any other person or entity, should use or refer to any Morgan Stanley trade name, trademark or service mark to sponsor, endorse, market or promote this product without first contacting Morgan Stanley to determine whether Morgan Stanley’s permission is required. Under no circumstances may any person or entity claim any affiliation with Morgan Stanley without the prior written permission of Morgan Stanley.
ETF Securities Limited, ETFS Foreign Exchange Limited, ETFS Commodity Securities Limited, ETFS Metal Securities Limited, ETFS Oil Securities Limited, and Gold Bullion Securities Limited are each regulated by the Jersey Financial Services Commission. ETFS Fund Company PLC is regulated by the Financial Regulator in Ireland.
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