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ETF Securities sees USD185m in weekly inflow into exchange-traded commodities


Exchange-traded product provider ETF Securities has reported strong investment in exchange-traded commodities last week, which saw net inflows of USD185m into a range of ETCs including pre

Exchange-traded product provider ETF Securities has reported strong investment in exchange-traded commodities last week, which saw net inflows of USD185m into a range of ETCs including precious metals, energy and industrial metals.

The firm says net inflows into ETCs over the past three weeks are down to changing investor sentiment toward various commodities, while the collateralisation of the full value of more 120 ETCs by a subsidiary of American International Group has reduced the credit exposure of ETCs issued by ETFS Commodity Securities.

Despite last week’s Thanksgiving holiday in the US, ETFS Physical Gold saw USD140m of inflows, the highest level for seven weeks, and the ETC’s price ended the week at USD80.99, up 10.4 per cent since November 20. In total, physical gold ETCs have enjoyed USD1.64bn in inflows this year.

ETFS Physical Platinum experienced inflows of USD35m last week, producing the highest level of securities issuance since February 2008, and its price ended up 5.9 per cent at USD85.33.

Combined flows into ETFS Crude Oil, ETFS Brent, ETFS WTI and ETFS Leveraged Crude Oil rose by USD33m in the fifth consecutive weekly increase. Inflows into long oil ETCs have now totalled USD93m over the past four weeks, reversing the strong outflows during August and September.

ETFS Short Crude Oil recorded its seventh consecutive week of outflows, also reflecting the more positive outlook since oil prices moved into the USD50 per barrel range. This is in contrast to just a few months ago when oil prices peaked at around USD147 per barrel and ETFS Short Crude Oil was the most highly traded ETC or ETF on the London Stock Exchange.

‘Last week’s inflows into exchange-traded commodities show many investors are still interested in a wide range of commodities despite the recent pull back as a result of the weakening economy,’ says ETF Securities chief operating officer Nik Bienkowski (photo).

‘USD185m of inflows into ETCs is a good achievement in any market. The prices of most ETCs have fallen by 25 to 50 per cent since July 1, but the pattern of flows into ETCs last week indicate that investors may be starting to view many commodities more positively.

‘A fall in demand has driven commodity prices down recently, however the tight supply situation in a number of commodities has not changed significantly. Recent record flows into ETFS Physical Platinum and oil ETCs, whose prices have fallen by approximately 65 per cent from their peaks this year, show that some commodities may now be offering good long-term potential.’

Nichols Brooks, head of research and investment strategy at ETF Securities, adds: commented: ‘The strong flows into ETFS Physical Gold appear to be part of increasing fund flow into physical gold including coins, gold bars and jewellery.

‘Physical demand for gold has surged as investors have become increasingly concerned about the outlook for major currencies, with central banks forced to ease aggressively and governments to increase spending and debt substantially in an attempt to offset collapsing private sector growth.’

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