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ETF Securities launches exchange-traded precious metals platform backed by physical metal on the Deutsche Börse


ETF Securities has listed a range of physically backed, precious metal, Exchange Traded Commodities (ETCs) on Deutsche Börse.

ETF Securities has listed a range of physically backed, precious metal, Exchange Traded Commodities (ETCs) on Deutsche Börse. Platinum, palladium, silver and a precious metals basket are now available to German investors through ordinary brokerage accounts.

The 4 separate classes of metal securities listed are:

  • ETFS Physical Platinum German ISIN: DE000A0N62D7
  • ETFS Physical Palladium German ISIN: DE000A0N62E5
  • ETFS Physical Silver German ISIN: DE000A0N62F2
  • ETFS Physical Gold German ISIN: DE000A0N62G0.

The basket of metals to be listed is ETFS Physical PM Basket German ISIN: DE000A0N62H8. The basket consists of platinum (20%), palladium (12%), silver (26%) and gold (42%).

First dealings in these securities commenced on Deutsche Börse’s electronic trading system Xetra today, Wednesday 9th May.

The listing on the Deutsche Börse follows the recent successful launch of the world’s first exchange traded precious metals platform backed by physical metal on the London Stock Exchange.

The launch of this new range of ETCs on Deutsche Börse is in response to the strong interest that investors have shown in ETFs and Deutsche Börse’s new ETC segment. Currently Deutsche Börse’s XTF segment is by far the largest ETF market place in Europe and accounts for over 40% of total European trading volume in exchange-traded funds.

The listings come from the same management team who created the world’s first ETC, Gold Bullion Securities in Australia and London which now have over USD 2.2 billion of assets combined. All of the new ETCs are backed by physical allocated metal – uniquely identifiable bars which carry no credit risk – held by the Custodian HSBC Bank USA N.A., who is the world’s leading Custodian for ETCs with over USD 13 billion of precious metals being 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) and Securities will only be issued once metal is confirmed as being deposited into the Company’s Bullion account with the Custodian.

The listing also coincides with assets in ETF Securities’ new ETCs exceeding USD 750 million for the first time, with over 25% of total assets attributable to precious metals. ETF Securities listed 3 precious metal ETCs in Germany in October 2006 based on DJ-AIG Commodity IndicesSM tracking gold, silver and a gold-silver basket.

ETCs are relatively new investment tools which enable investors to gain exposure to commodity prices without trading futures or taking physical delivery. The 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 management fee which accrues daily.

Similar to Exchange Traded Funds, ETCs are open-ended securities which can be created or redeemed on demand provided that the relevant amount of metal is delivered to the Custodian by Authorised Participants or market makers, which currently include Fortis Bank Global Clearing N.V., HSBC Bank plc, Morgan Stanley & Co. International Limited, Flowtraders, IMC and Nyenburgh. Investors can buy and sell the new ETCs through regulated brokers or approved market makers. ETCs can be traded with all the same order types available to equities, including market, limit and stop orders. They can also be shorted through stock borrowing or CFDs.

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