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ETF Securities expands commission free access to commodities products


ETF Securities, a commodity exchange traded product (ETP) provider, has expanded commission-free access to its range of physically-backed precious metal exchange-traded funds (ETFs).

Partnerships with two platform providers have made ETFs offering exposure to gold, silver or a precious metal basket available on E*TRADE’s and Interactive Brokers’ Commission-Free ETF platform, which is also listing ETFs offering exposure to platinum and palladium.
All of the ETFs have been available commission-free on the Schwab ETF OneSource platform since 2013.
“During severe market corrections, precious metals have tended to perform positively, providing some measure of protection during selloffs,” says Steven Dunn, executive director and head of US distribution for ETF Securities. “By extending the range of ETFs offered commission-free, we hope to give investors easier access to a potential risk management product to help dampen volatility and, in some cases, hedge against tail risk in portfolios.”
Research has shown that physically-backed precious metal ETFs have low correlation to equities and fixed income, which potentially provides a diversification benefit.
Commodity markets experienced an exceptionally good ride in 2016. Investor appetite for commodities led to some record inflows for ETF Securities, which saw its global assets under management (AUM) increase approximately USD5.9 billion, the best performance since 2009. Commodity net inflows were USD4.2 billion for 2016, pushing ETF Securities commodity AUM to USD17.6 billion. Gold saw a very strong year with ETF Securities inflows of USD3.4 billion globally. 
“We are seeing momentum in these markets, and want to share that with investors through the ETFs on these platforms,” Dunn adds.
“Precious metal investment vehicles, like gold and silver ETFs, are often seen as ‘safe haven’ investments because they are composed of tangible commodities that keep their intrinsic value,” says Rich Messina, SVP, investment product management at E*TRADE. “With the addition of three ETF Securities precious metal ETFs, investors can gain exposure to this important investment type with ease, and now without paying a commission through E*TRADE.”

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