Investors pile $200m into ETF Securities' Currency platform as European debt crisis continues

• ETF Securities' Currency ETC platform sees AUM increase by 530% YTD, bringing AUM to $200 million
• ETFS Short AUD Long USD (SAD) receives $65m of inflows over the past month as SAD rises 14% in May
• Short EUR and short GBP also popular trades in May as investors look to profit from European debt crisis
• 84% of investors currently short G10 currencies vs. USD, with USD strengthening 16% since the inception of Currency ETC platform in November 2009
• Average monthly trading volume surges over 900% YTD as investors increase use of Currency ETCs as currency volatility rises 31% in the past month

London, 26/05/2010 - ETF Securities (ETFS), which launched the world's largest and Europe's first platform of Exchange Traded Currencies (Currency ETCs), has seen assets in the Currency ETC platform increase by 530% this year. Total AUM reached $200m having only been launched on 12 November 2009. We believe this growth in the Currency ETCs further exemplifies investors' acceptance of ETF Securities' collateralised ETC structure as a safe, easy and efficient way to invest in the FX market. ETFS Short AUD Long USD (SAD) is currently the largest Currency ETC with $67 million in AUM, having taken $65m of inflows in the past month. SAD is up 14% thus far in May as the market has begun to consider whether there will be a pause in Australia's rate hike cycle along with the potential effects on the local economy of the new mining profits tax.

ETFS Short EUR Long USD (SEUR) with $39 million AUM, and ETFS Short GBP Long USD (SGBP) with $16 million AUM, have also been popular, having captured around $20m of AUM in the past week as concerns over the European debt crisis have continued. SEUR is up 22.6% since the start of December 2009 and up 8.8% in May while SGBP is up 15.0% since the start of December 2009 and up 6.7% in May.

As the average one-month G10 currency volatility increased 31% (as of 25th May 2010), trading volumes in Currency ETCs have surged over 900% this year. ETCs have been designed to be liquid and simple instruments. As a result, Commodity ETCs (structured in a similar way to Currency ETCs) have seen their volumes increase from around $500m per week to around $2 billion per week in the past 2 years. Last week, Currency ETCs traded around $70m.

Martin Arnold, Senior Analyst, ETF Securities, commented:

“The Aussie dollar has come under pressure in recent weeks as a result of rising expectations of a pause in the rate hike cycle, and the potentially adverse impact from the government's newly proposed mining tax. Accordingly, our investors have implemented their increasingly bearish views regarding the Aussie dollar using ETFS Short AUD Long USD (SAD), with SAD's assets rising from $2 million to $67 million in the past four weeks.

But it has not been just the Aussie dollar under pressure as the European debt crisis rages on, with the latest concerns being fueled by weakness in the Spanish banking sector. Investors have also been taking views on the UK's ability to extricate itself from its own debt problems. The nascent UK Coalition government has much work to do convincing investors about its ability to introduce effective policy. ETFS Short GBP Long USD (SGBP) has been the way investors are expressing their doubts about the potential effectiveness of the Coalition government.”

Currency ETCs which were Short G-10 currencies versus USD performed best as the USD strengthened 16% versus the DXY Dollar Index. The table below shows the best performing Currency ETCs since inception on 12th November 2009 and the top 5 Currency ETCs by assets.


Source: ETF Securities, Bloomberg, ¹ ETFS Currency ETC returns from 12/11/2009 to 25/05/2010, ² share of Currency platform AUM as of 25/05/2010

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, and G10 currencies versus the Euro including GBP, CHF, NOK, SEK and JPY. The Currency ETCs also provide exposure to local interest rates in addition to FX movements. For example the implied interest rate incorporated into the MSFX Long Australian Dollar IndexSM is approximately 4.6% p.a. (Source: ETF Securities as of 25rd May 2010).

For further information, please contact:

Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com

Conference Call:

Are Interest Rate Hikes Imminent? Implications for G10 Currencies
Date: Thursday 3rd June 2010
Time: 11:00am and 3:00pm London Time
Guest Speakers: Martin Arnold, Senior Analyst, ETF Securities Marketing LLP

This call will discuss:

• ETF Securities Currency ETC platform
• Where do we stand in the business cycle?
• G10 sovereign analysis: risks and policy options
• Implications for G10 currency outlook
• Questions and Answers

To register your place today: www.etfsecurities.com/en/events/etfs_events_calls.asp

About ETFS Currency ETCs:

The first 18 ETFS Currency ETCs were listed on the LSE on the 12th November 2009 and track MSFX Currency IndicesSM. Since inception, the ETFS Currency ETCs have rapidly generated interest with eight liquidity providers signing up and four Multilateral Trading Facilities (MTFs) to provide investors access to these new securities. Further 10 Euro-based Currency ETCs were listed on the Deutsche Boerse (Xetra) on the 10th March 2010.

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 but traded on a regulated exchange in the same way as an equity. Historically, the average daily turnover of the global FX market is about $3.2 trillion which compares to the average daily turnover of $450 billion for global equities, $48 billion for the New York Stock Exchange and $6 billion for the London Stock Exchange. Thus currencies are considered much more liquid than equities.

ETF Securities launched the ETFS Currency ETC platform due to investor demand for secure, transparent and liquid exchange traded products. ETFS Currency ETCs are fully backed* by eligible collateral to the value of at least 100% of the total value of all ETFS Currency ETCs outstanding which is held in a segregated custody account with BNY Mellon. The collateral is adjusted daily to ensure credit risk is minimised. ETFS Currency ETCs are backed by the same eligible collateral criteria as ETF Securities' existing Commodity ETCs. With ETF Securities' Commodity ETC assets having grown by approximately 150% in 2009 to nearly $19 billion and volumes having quadrupled to around $2 billion per week, it is clear that investors have widely accepted the ETC structure as a secure vehicle of choice for exposure to commodities. As a result, the ETC product structure has been replicated to include currencies.

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) above 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 across 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.

*ETFS Currency ETCs are fully collateralised. The total value of ETFS Currency ETCs outstanding is backed by between 100% and 110% of Eligible Collateral held in a segregated Custody Account with BNY Mellon. The value of the ETFS Currency ETCs and Eligible Collateral are marked to market daily so that at the end of the previous trading day, all ETFS Currency ETCs are fully backed to minimise counterparty risks.

To learn more about ETF Securities go to: www.etfsecurities.com

Disclaimer:

This press release was issued by ETF Securities Marketing LLP for journalists in the United Kingdom. The products discussed in this document (the “Securities”) are issued by ETFS Foreign Exchange Limited (“FXL”). FXL is regulated by the Jersey Financial Services Commission. The United Kingdom Listing Authority is the ‘home regulator' for FXL for purposes of passporting its prospectus under the Prospectus Directive.

This press release appears as a matter of record only and does not constitute an offer to sell or an invitation to purchase any securities. Important information is contained in the FXL prospectus and other documents, copies of which can be obtained by calling +44 (0)20 7448 4330 or by e-mail at info@etfsecurities.com.

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