Source continued its impressive run since entering the European ETP market in 2009 by leading all ETC issuers in net new assets in 2011 with USD1.26 billion of net inflows.
The provider’s flagship ETC, Source Physical Gold, captured significant inflows, bringing assets in the product to over USD2.3 billion. Overall, Source commanded nearly 20% of total commodity ETP net new assets in Europe, doubling its total commodity assets under management to USD2.5 billion. These results were particularly meaningful given the presence of well-established competition in this market.
Stefan Garcia, head of commodity sales at Source says: ‘I think that focusing on clients and providing them with commodity products that satisfy their multiple needs has put us in a very strong position in the commodity segment of the ETP market. In addition, with innovative new products, such as the new LGIM Commodity Composite Source ETF, we continue to provide clients with a number of tailored solutions in a segment of the market into which they are focussed and continuing to allocate assets.’
Besides registering strong net inflows, Source marked new high points in the commodity segment in 2011 as the total trading volume on the LSE in Source Physical Gold crossed USD4 billion, a 400% increase on 2010. In addition, the average bid/offer spread on Source Physical Gold has dropped below 10bps on the London Stock Exchange. According to Garcia, ‘Clients are increasingly focussed on liquidity and transparency in ETPs, and we have made a real effort to address these concerns. The numbers are very encouraging.’
Source’s progress in commodities comes on top of ranking third by net new assets gathered across all ETP products in Europe, trailing only Blackrock and UBS, and well ahead of other significant competitors in the market.
Ted Hood (pictured), CEO of Source says: ‘Clients are embracing our model and its focus on transparency, quality, efficient risk management. We made a significant effort in 2011 to go out and speak to our clients in great detail on all of these topics; our message is resonating well with investors, as reflected in the numbers for 2011. In 2012, we will continue to focus on our clients’ needs and addressing the issues they face. The numbers and rankings will take care of themselves.’