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ETF Securities enters Japanese market with precious metals platform

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ETF Securities will be launching Japan’s first ever commodity exchange-traded fund precious metals platform on the Tokyo Stock Exchange on 24 August.

ETF Securities will be launching Japan’s first ever commodity exchange-traded fund precious metals platform on the Tokyo Stock Exchange on 24 August.

The platform consists of five physically backed commodity ETFs: ETFS Physical Gold, ETFS Physical Silver, ETFS Physical Platinum, ETFS Physical Palladium and ETFS Physical PM Basket.

This is the first time that silver, platinum, palladium or a precious metals basket have been made available to Japanese investors through ordinary brokerage accounts.

The platform also includes gold which is ETF Securities’ most successful commodity ETF.

First dealings in these securities are expected to commence on the Tokyo Stock Exchange on 24 August 2009.

Graham Tuckwell, chairman of ETF Securities, says: “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 commodity ETFs, which have seen steady growth over the last six years to over JPY5trn. Second, Japan has a history of commodities and precious metals and we felt that the local Japanese market should be provided access to these new and robust commodity ETFs. Until now, precious metals have historically been extremely difficult to access.

‘Unlike many other commodities, precious metals are durable and easily stored, enabling those commodity ETFs to be backed by allocated physical bars which have transparent pricing and carry no credit risk. As a result, the new physical commodity ETFs save investors from many of the difficulties associated with purchasing precious metals such as access to physical bars, storage and insurance.’

Nobiru Adachi, country head for Japan at ETF Securities, adds: ‘The Japanese market has always been very focused on resource equities, and investors will now have the opportunity to get direct exposure to precious metals to complement equity investment. These products have no credit risk as those commodity ETFs are 100 per cent 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.’

The new commodity ETFs are backed by physical allocated metal held by the custodian HSBC. All physical metals held with the custodian must conform to the rules for good delivery of the London Bullion Market Association and London Platinum Palladium Market.

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