|
 |
Currency ETC Assets Rise to $49mn and Trading Volumes Soar
as Investors Build Long US Dollar Positions and Turn Negative on the Euro as Greek
Debt Crisis Worsens
02/02/10
- Assets rise to over $49 million following successful launch on the LSE
- Trading volume reach weekly record, up 240% since start of 2010
- 81% of investors currently long USD, with USD strengthening 6.7% since
November
- ETFS Short EUR Long USD (SEUR) captures 50% of new assets, as investors
positions themselves to benefit from the current sovereign debt problems in
Greece
London, 02/02/2010 - ETF Securities (ETFS), which launched the world’s largest and
Europe’s first platform of Exchange Traded Currencies (Currency ETCs) in November 2009, has
seen assets in the platform grow to $49 million since inception with weekly trading volumes
continuing their growth, up 240% since the start of 2010.
Currency ETCs which are Long USD and short G10 currencies have seen the most interest
from investors, making up 81% of assets. The interest has occurred as the USD strengthened
6.7% versus the Dollar Index (DXY index) since the recent low on 25th November 2009 to 29th
January 2010. ETFS Short EUR Long USD (SEUR) has been the most popular trade in 2010,
capturing 50% of new assets, while the Australian dollar held the most net long positions.
The platform has seen continuous increases in turnover since inception. 80% of trading
volumes have occurred in ETCs which are long USD and short G10 currencies, with ETFS Short
EUR Long USD (SEUR) taking 21% share of trading volumes, followed by ETFS Short AUD
Long USD (SAD) and ETFS Short GBP Long USD (SGBP) with 18% each.
Martin Arnold, Senior Analyst, ETF Securities, commented:
“Sentiment in the foreign exchange market has changed dramatically over the past week as
investors increasingly question whether the strong price performance of risk assets in 2009
can be sustained in 2010. The Eurozone is firmly in the spotlight for FX investors, with
Greece’s debt problems weighing heavily on the Euro. Monetary tightening in China and India
has also been a catalyst for increasing risk aversion. The market pessimism has pushed
currency volatilities higher in recent days, and it should come as no surprise that the highest
yielding currencies are also under pressure. Investors are not only looking to ETFS Short EUR
Long USD (SEUR) to implement ‘safety’ strategies, but are beginning to unwind risk via ETFS
Short AUD Long USD (SAD) and ETFS Short NZD Long USD (SNZD)”.
Currency ETCs which were Long USD (except for Japanese Yen) performed best as the USD
strengthened. The table below shows the best performing currencies since inception of the
Currency ETCs on 12th November 2009 and also the past 12 months. Over the last 12 months,
long versions of the higher yielding G-10 currency indices were in the top five performers such
as the Australian Dollar and New Zealand Dollar.
| ETFS Currency ETCs since inception1 |
| ETFS Short EUR Long USD |
6.5% |
| ETFS Short SEK Long USD |
6.4% |
| ETFS Short NOK Long USD |
3.9% |
| ETFS Short CHF Long USD |
3.3% |
| ETFS Short NZD Long USD |
2.7% |
| ETFS Currency ETCs over the past 12 months2 |
| ETFS Long AUD Short USD |
49.1% |
| ETFS Long NZD Short USD |
48.3% |
| ETFS Long NOK Short USD |
23.3% |
| ETFS Long CAD Short USD |
19.7% |
| ETFS Long SEK Short USD |
18.2% |
Source: ETF Securities, Bloomberg, 1Currency ETC returns from 12/11/2009 to 29/01/2010, 2Returns from
30/01/2009 to 29/01/2010 are simulated from MSFX Currency Indices and do not include the impact of
fees.
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. 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 averaged approximately 5%
p.a. over the past five years.
For further information, please contact:
Helen Burden
Tel: +44 (0) 20 7448 4330
Email: helen.burden@etfsecurities.com
Conference Call:
The Rise of Sovereign Risk: The New Driver of Currency Returns
Date: Thursday 18th February 2010
Time: 11:00am and 3:00pm London Time
Speaker: Martin Arnold, Senior Analyst, ETF Securities Ltd
This call will discuss:
- Key factors affecting currency returns
- The rise of sovereign risk - a new key driver of returns
- Implications for the G10 currencies
- Tactical and long-term strategies profit from this theme
To register your place today: www.etfsecurities.com/en/events/etfs_events_calls.asp
About Currency ETCs:
The first 18 Currency ETCs were listed on the LSE on the 12th November 2009 and track MSFX
Currency IndicesSM. Since inception, the 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.
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. 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 much more liquid than equities.
ETF Securities launched the Currency ETC platform due to investor demand for secure,
transparent and liquid exchange traded products. Currency ETCs are fully backed* by eligible
collateral to the value of at least 100% of the total value of all 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. 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 over $16 billion and volumes having
doubled to around $1 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) 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.
*Currency ETCs are fully collateralised. The total value of 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 Currency ETCs and Eligible Collateral are marked to market daily
so that at the end of the previous trading day, all Currency ETCs are fully backed to minimise
counterparty risks.
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.
|
|
|
