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The ETFS Silver Trust, ETFS Gold Trust, ETFS Platinum Trust and ETFS Palladium Trust are not investment companies registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. This Material must be accompanied or proceed by the prospectus. These investments are not suitable for all investors.
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A guide to Physically Backed Bullion Shares
| What are they |
Physically Backed Bullion Shares track precious metal prices - not commodity or mining companies. The shares enable the investor to gain direct exposure to precious metals without trading derivatives such as futures or taking physical delivery of the underlying commodity |
| What is the legal structure |
The structure is a Grantor Trust offered under the Investment Act of 1933. The Trust enables investors to gain direct exposure to precious metals without trading derivatives such as futures or taking physical delivery of the underlying commodity. The Trust only holds physical bullion and therefore has been structured as a 1933 Act Grantor Trust. |
| Similarities to ETFs |
Like an ETF, the Trust is open ended and listed on NYSE Arca. Shares can be bought and sold intra-day using ordinary brokerage accounts. The Shares can be shorted and are eligible for margin accounts. They can be executed as market orders, stop losses or limit orders. There are special risks associated with short selling and margin investing. Please ask your financial advisor for more information about these risks. |
| Who are the Market makers |
More Information |
Key Features of Physically Backed Bullion Shares
| Track |
The shares track the respective underlying precious metal price less applicable fees |
| Liquid |
The Trust is open-ended and the shares are listed on NYSE Arca. As shares can be created by Authorized Participants to demand, liquidity is therefore not limited to on-exchange volumes |
| Accessible |
The shares are traded and settled on the NYSE Arca, the same as listed stocks. Shares can be purchased and held in ordinary brokerage or custodial accounts
Dealing in the shares does not involve any of the complexities associated with trading or managing commodity futures (eg. Maintenance of margin accounts, rolling of futures positions) or in buying and storing physical commodities
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| Transparent |
ETF Securities commissions a biannual independent audit of the bullion held in the Trust vaults. The audit is carried out by Inspectorate International. Inspectorate International is a global company providing inspection, testing, and analysis of commodities worldwide. There is one audit that takes place at year end, 31st December and one random audit carried out at the discretion of ETF Securities management. All audit reports are published on our website www.etfsecurities.com
In addition to the stringent audit procedures set in place by ETF Securities, the custodian also conducts their own audits as part of their custodial duties
ETF Securities also publishes a Metal Bar list detailing the bullion bars held by the Trust on a daily basis
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| Pricing |
The shares are priced from the spot price of relevant underlying precious metal. The Trust uses the London PM Fixing price for the relevant precious metal. For example, each share represents a 1oz or 1/10oz interest in silver and gold respectively. Detailed pricing is available for all products on the ETF Securities website. |
| Flexible |
Like stocks, the shares can be shorted and are eligible for margin accounts. They can be executed as market orders, stop losses or limit orders. There are special risks associated with short selling and margin investing. Please ask your financial advisor for more information about these risks. |
| Management record |
ETF Securities is the innovator and leader in the issuance of Exchange Traded Commodity products. ETF Securities is one of Europe’s largest ETF providers. The management of ETF Securities created the world's first physical Gold ETF in 2003 - Gold Bullion Securities, in Australia and London. In 2005, ETF Securities created the world's first Oil ETF and then in 2006, ETF Securities created the world's first exchange traded commodity platform on the London Stock Exchange, making available 19 commodities and 10 indices. In 2007, ETF Securities created the world's first physically backed precious metals platform, making available platinum and palladium for the first time ever. ETF Securities has most recently launched the largest platform of thematic sector ETFs in Europe providing exposure to European firsts such as Coal, Steel, Shipping and Nuclear Power. |
ETFS Physical Silver Shares are issued by the ETFS Silver Trust. ETFS Physical Swiss Gold Shares are issued by the ETFS Gold Trust. ETFS Physical Platinum Shares are issued by the ETFS Platinum Trust. ETFS Physical Palladium Shares are issued by the ETFS Palladium Trust.
ETFs = Exchange Traded Funds
Important Risks
The value of the Shares relates directly to the value of the precious metal held by the Trusts and fluctuations in the price could materially adversely affect an investment in the Shares. Several factors may affect the price of precious metals, including:
A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trusts. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares;
Investors' expectations with respect to the rate of inflation;
Currency exchange rates;
Interest rates;
Investment and trading activities of hedge funds and commodity funds; and
Global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the Trusts or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the Shares.
Also, should the speculative community take a negative view towards the precious metal held by the Trusts, it could cause a decline in prices, negatively impacting the price of the Shares.
There is a risk that part or all of the Trusts' physical precious metal could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts. Since there is no limit on the amount of platinum and palladium that the Trust may acquire, the Trust, as it grows, may have an impact on the supply and demand of platinum and palladium.
The Trusts have limited operating history.
Commodities generally are volatile and are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility.
Please refer to the prospectus for complete information regarding all risks associated with the Trusts.
Shares in the Trusts are not FDIC insured and may lose value and have no bank guarantee.
Investors buy and sell shares on a secondary market (i.e., not directly from Trusts). Only market makers or "authorized participants" may trade directly with the Trusts, typically in blocks of 50k to 100k shares.
Carefully consider each Trusts' investment objectives, risk factors, and fees and expenses before investing.
ALPS Distributors, Inc. is the marketing agent for ETFS Silver Trust, ETFS Gold Trust, ETFS Platinum Trust and ETFS Palladium Trust.
For further discussion of the risks associated with an investment in the Trusts please read the prospectus.
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