Sydney, Nov 20, 2008 AEST (ABN Newswire) - The global pioneer in exchange traded commodities (ETCs), ETF Securities, today announced that it intends to list a range of physically-backed, precious metal, exchange traded commodities on the Australian Stock Exchange. This is the first time that silver, platinum, palladium or a precious metals basket have been made available to Australian investors through ordinary brokerage accounts.
ETF Securities has also formally completed the acquisition of the world's first gold ETC - Gold Bullion Securities, listed on the Australian Stock Exchange (ASX:GOLD).
The four metal securities to be listed are:
- ETFS Physical Platinum
- ETFS Physical Palladium
- ETFS Physical Silver
- ETFS Physical PM Basket
First dealings in these securities are expected to commence on the ASX in December 2008.
Commenting on the intention to list this new range of physical ETCs, Graham Tuckwell, chairman of ETF Securities, said:
"Our decision to launch this range of precious metals is two-fold. First, it comes in the wake of increasing global demand for precious metals through ETCs, which have seen steady growth over the last four years to over A$38 billion. Second, we want to offer investors exposure to a broad range of precious metals, which have historically been extremely difficult to access.
"Unlike many other commodities, precious metals are durable and easily stored, enabling ETCs to be backed by allocated physical bars which have transparent pricing and carry no credit risk. As a result, the new physical ETCs save investors from many of the difficulties associated with purchasing precious metals such as access to physical bars, storage and insurance.
"ETCs provide investors with an investment vehicle that tracks the price of precious metals, not a portfolio of equities. Uncorrelated to equities, they can provide investors with additional portfolio diversification.
"The Australian market has always been very focused on resource equities, and investors now will have the opportunity to get direct exposure to precious metals to complement equity investment. These products have no credit risk as ETCs are 100% backed by allocated bullion held in trust; this has become a very important selling point in today's markets given the increased focus on credit and counterparty risks."
ETCs are designed to offer investors a simple, cost-efficient and secure way to access the precious metals market. They provide investors with a return equivalent to movements in their spot price less a small annual management fee, which accrues daily.
Similar to Exchange Traded Funds (ETFs), ETCs are open-ended securities, which can be created or redeemed on demand. Investors can buy and sell ETCs through regulated brokers or approved market makers; they can be traded in the same way as equities, including market, limit and stop orders. They can also be shorted through stock borrowing or CFDs. The minimum trade size is one security and settlement is T+3 (trade date plus three business days).
The management of ETF Securities created the world's first ETC, Gold Bullion Securities, which is listed in Australia. Subsequent listings of similar products have taken total assets managed by ETF Securities to almost A$9 billion equivalent.
The new ETCs are backed by physical allocated metal held by the custodian HSBC N.A., the world's leading custodian for ETCs with over A$30 billion of precious metals held for such products. All physical metals held with the custodian must conform to the rules for good delivery of the London Bullion Market Association (LBMA) and London Platinum Palladium Market (LPPM).
Australian Graham Tuckwell is the founder and chairman of the ETF Securities group of companies (and also of Gold Bullion Securities Limited). Previously, Graham was the founder and managing director of Investor Resources Limited, a boutique corporate advisory firm specialising in the resources sector.
ENDS
Contact
Kathy Tricolas
Account Manager
Direct: +61 2 8264 1008
Main: +61 2 9235 1666
Fax: +61 2 9235 1920
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email: k.tricolas@fcr.com.au
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