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ETF Securities launches sterling-hedged commodities solution for UK investors


ETF Securities has launched a range of 14 new sterling-hedged Exchange Traded Commodities (ETCs) on the London Stock Exchange.

The products are designed to mitigate the effects of currency volatility in the portfolios of sterling-based investors by reducing exposure to the US dollar – the currency in which most commodities are priced.

The New ETCs track the performance of the Dow Jones-UBS Commodity Index Pound Sterling Hedged Daily Total Return and its sub-indexes, which are designed to reflect, as closely as possible, returns that would be generated if the underlying commodities were purchased in US dollars.

Foreign exchange exposure is hedged on a daily rather than monthly basis, in order to improve tracking performance.

Each of the 14 new products carries an MER (management expense ratio) of 0.49% and are supported by multiple swap counterparties and fully collateralised.

Neil Jamieson (pictured), Head of UK Sales, ETF Securities (UK) Limited, says: "These new sterling-hedged commodity products enhance our existing range of commodity investment solutions. There are many sterling-based investors who wish to hedge out currency risk. Our Exchange Traded Commodities that track Dow Jones-UBS Commodity Index Pound Sterling Hedged Daily will provide these investors with an innovative and effective solution. The products will also appeal to those investors who actively manage currency exposure with a view to enhancing overall investment returns."

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