Since Source was launched in April 2009, it has raised nearly USD9bn in assets and seen more than USD345bn traded across its exchange-traded product suite, making it one of Europe’s fastest-growing ETF providers.
With counterparty risk at the forefront of investors’ mind, Source has distinguished itself through the implementation of strong risk management practices. Owned by five of the world’s largest trading houses – Goldman Sachs, J.P. Morgan, Morgan Stanley, Bank of America-Merrill Lynch and Nomura– Source is uniquely positioned to deliver highly liquid products and deliver enhanced returns to investors through reduced trading costs.
Despite the challenging economic environment, 2011 was packed with new milestones for Source. It cemented its position as one of the leading players in the European ETP market by gathering the third largest share of net new assets in European ETPs. In addition, it partnered with some of the biggest players in the financial industry to deliver ground-breaking products that respond to investors’ needs.
“In the past year, we teamed up with PIMCO, Man GLG and Legal & General Investment Management,” says Source chief executive Ted Hood (pictured). “With PIMCO, we launched an innovative range of physically-replicated fixed-income ETFs, including Europe’s first actively-managed ETFs.
“The Man GLG Europe Plus Source ETF was designed to capture and deliver value by harnessing the best ideas from leading European brokers, and by leveraging LGIM’s expertise as an index manager we designed a high quality Ucits-compliant ETF providing diversified exposure to commodities.”
Within the commodity space the Source ETC platform, which currently boasts 27 T-ETCs backed by US Treasuries and four P-ETCs collateralised by precious metals, commanded nearly 20 per cent of total net new assets in commodity ETPs in Europe last year.
Source’s largest product, the Source Physical Gold P-ETC, attracted USD1.26bn in net new assets, taking its total assets to more than USD2.3bn and ranking it among the top gold products in Europe. It also recorded more than USD9bn in turnover during the year, making it one of the most traded ETPs in Europe.
“These results were particularly meaningful given the well-established competition in this market,” Hood says. “Source also marked new high points in the commodity segment last year as the total trading volume of Source Physical Gold on the London Stock Exchange passed USD4bn – a 400 per cent increase over 2010.”
The primary focus for Source is on enhancing investor returns. This is underscored by the number of partnerships it has developed with market participants in the past three years to develop outstanding products that respond to the challenges faced by investors today.
Says Hood: “In the past year, we also launched volatility products with Nomura and J.P. Morgan that provide exposure to volatility, while mitigating some of the cost of holding a long volatility position. These products have resonated well with European investors, capturing a market share of more than 75 per cent in European volatility products.
He adds: “We are delighted to have won awards that have been voted on by market participants. It truly shows that they recognise our efforts and like our approach.”