ETF Securities launches 4 new ETCs covering Cocoa, Lead, Tin and Platinum to complete its platform of long, short and leveraged Commodity ETCs ….
- 4 New Commodity ETCs offering long exposure to Cocoa, Lead, Tin, and Platinum to be listed on LSE
- ETF Securities now offers long, short and leveraged ETCs on all 23 DJ-UBSCISM single commodity indexes
- The new ETCs complete the world’s most comprehensive and highly traded Commodity ETC platform
- ETF Securities’ AUM at an all time high of $16.1bn, nearly tripling over the past year
London, 12/11/2009 ETF Securities (ETFS), the global pioneer in Exchange Traded Commodities (Commodity ETCs) and 3rd generation Exchange Traded Funds (ETFs) has expanded its commodity offering with the listing today of four new long ETCs offering exposure to Cocoa, Lead, Tin, and Platinum on the London Stock Exchange (LSE). The indices underlying the new ETCs are up an average of 44% in the past twelve months.
With Commodity ETC assets having nearly tripled in 2009 and volumes having doubled, ETF Securities is listing four new Commodity ETCs as a response to investor demand for more extensive choice with regards to single commodity investing. The new Commodity ETCs are designed to track the Dow Jones – UBS Commodity IndicesSM on Cocoa, Tin, Lead and Platinum which are priced off the relevant commodities futures contracts.
The listing of ETFS Cocoa (COCO), ETFS Tin (TINM), ETFS Lead (LEED) and ETFS Platinum (PLTM) bring ETF Securities’ commodity ETC platform of long, short and leveraged Commodity ETCs to 148, making it the world’s most comprehensive and liquid stock exchange traded commodity platform.
ETF Securities launched the world’s first Commodity ETC platform in Europe between 2003 and 2006 and has accumulated over $16 billion in assets. ETF Securities’ Commodity ETC platform experienced record trading volumes in October 2009 with over $5.2 billion traded globally. Over $3 billion was traded on the LSE alone, with weekly trading regularly exceeding $1 billion, reaching $1.4 billion at the end of October.
The four new Commodity ETCs are now listed on the ETC segment of the LSE. All ETCs tracking DJ-UBS Commodity IndicesSM are fully collateralised in order to mitigate counterparty risk using ETF Securities’ standard requirements for eligible collateral assets which requires between 100% to 110% coverage of the outstanding value.
ETFS Cocoa (COCO)
The DJ-UBS Cocoa Total Return IndexSM was up 60% in the 12 months to 2 Nov 2009 and was up 24% in 3Q 2009 alone. The Index has also seen impressive growth over longer time horizons, with 5 and 10 year returns of 85% and 198% respectively. As has been the case for sugar, supply shortages have been supporting cocoa prices recently with the potential impact of El-Nino weather disruptions and upward demand revisions on improving economic activity indicators adding further support to prices.
ETFS Tin (TINM)
The DJ-UBS Tin Total Return IndexSM increased by 48% in the 12 months to 2 Nov 2009 and was up 9% in 3Q 2009. The index is up 110% and 271% respectively over the past 5 and 10 years, outperforming broad industrial metals returns as measured by DJ-UBS Industrial Metals Total Return IndexSM (up 79% and 162% on a 5 and 10 year basis respectively).The International Tin Research Institute (ITRI) expects almost all the growth in tin demand over the coming 4 years to come from China and other emerging Asian markets, with both solder and tinplate usage increasing.
ETFS Lead (LEED)
The DJ-UBS Lead Total Return IndexSM increased 34% this year to 2 Nov 2009. The index has been one of the strongest performers of all of the DJ-UBS Commodity IndexesSM over the past decade, up 536% in the 10 years to 2 Nov 2009. Seventy percent of world lead production is used in lead-acid batteries that are largely used in automotive production. In 2010 China is expected to account for approximately 45% of total world annual demand for lead, with 8% demand growth for the country forecast over the coming year according to International Lead and Zinc Study Group.
ETFS Platinum (PLTM)
The DJ-UBS Platinum Total Return IndexSM increased by 41% in the 12 months to 2 Nov 2009, and was up 10% in 3Q 2009. The index is up 469% over the past 10 years, over twice the return of the DJ-UBS Precious Metals Total Return IndexSM. Stronger auto production this year, particularly in the US and Europe, has provided cyclical support to platinum demand over 2009, complemented by strong trend growth in car and truck fleets in China and other emerging markets. Platinum supply is affected by infrastructure and labour shortages while mine production hit its lowest level since 2003 last year, in decline for two consecutive years.
|DJ-UBS Cocoa TR IndexSM|
|DJ-UBS Tin TR IndexSM|
|DJ-UBS Platinum TR IndexSM|
|DJ-UBS Lead TR IndexSM|
Source: Bloomberg, index Returns expressed in USD, data as at end of October 2009
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.
Investors can buy and sell ETCs on the LSE, through regulated brokers or ETF Securities’ network of over 20 approved market makers and authorised participants. The new Commodity ETCs can 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. All ETCs tracking DJ-UBS Commodity IndicesSM are fully collateralised in order to mitigate counter-party risk using ETF Securities’ standard requirements for eligible collateral assets which requires between 100% to 110% coverage of the outstanding value.
Nicholas Brooks, Head of Research and Investment Strategy, commented:
“The four new long Commodity ETCs tracking tin, lead, cocoa and platinum provide investors’ with an easy and secure way to invest in the commodities markets. ETFS Tin (TINM) is Europe’s first long tin futures ETC, tracking the DJ-UBS Tin Total Return IndexSM. Tin has been a strong performer, with the index up 48% over the past twelve months and 271% over the past ten years on rapidly growing China demand for tin.
“Cocoa has also performed very strongly recently (up 60% over the past year) as weather disruptions have hit supply and demand has held up better than expected through the economic downturn.”
“Lead, primarily used in automobile batteries, been one of the strongest performers of all of the DJ-UBS commodity indexes over the past decade, up 536% over the period.”
“These new additions bring ETF Securities’ Commodity ETC platform of long, leveraged and short ETCs to 148, making it the world’s most comprehensive and liquid stock exchange traded commodity platform.”
Source: ETFWorld – ETFSecurities