ETF Securities sees inflows of over $1 billion into gold and oil ETPs

Feb 10th, 2016 | By | Category: Commodities

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ETF Securities, one of the world’s leading providers of commodities-based exchange-traded products (ETPs), has announced record year-to-date net inflows of over $1 billion since 1 January 2016.

ETF Securities sees inflows of over $1 billion into gold and oil ETPs since January 2016

ETF Securities has seen inflows of over $1 billion into its gold and oil ETPs since January 2016.

Highlights include $720 million into gold-linked ETPs (99% into physically backed ETPs) and over $320 million into oil linked ETPs.

Yesterday, Tuesday 9th February, the London-headquartered firm saw its highest ever one day net inflow, of $345 million into its gold-linked ETPs.

ETF Securities’ physical gold ETPs include the $4 billion ETFS Physical Gold (PHAU) and the $2.8 billion Gold Bullion Securities (GBS). PHAU is backed by physical allocated gold held by HSBC. Only metal that conforms with the London Bullion Market Association’s rules for ‘Good Delivery’ can be accepted and each physical bar is segregated, individually identified and allocated. GBS offers similar protections but also benefits from a unique feature which allows investors to redeem their securities directly for physical gold. They can receive either unallocated gold or Britannias or Sovereigns issued by The Royal Mint of Great Britain.

In the oil space, ETF Securities’ largest products are the ETFS WTI Crude Oil (CRUD) and the ETFS Brent 1mth (OILB), with assets of $623 million and $276 million respectively. CRUD tracks the Bloomberg Crude Oil Sub-Index, an index designed to reflect the movement in the price of the WTI crude oil futures contracts. OILB is designed to enable investors to gain a total return exposure to movements in the price of ICE 1 month Brent crude oil futures contracts plus a collateral yield. The exposure is obtained through swaps with Royal Dutch Shell Group.

Commenting on the performance, Mark Weeks, CEO of ETF Securities, said: “While our strategy has been to become a genuine multi-asset provider by diversifying into other asset classes, commodities and especially gold remains the cornerstone of our offering. We believe this performance, while undoubtedly aided by current market conditions, is also due to the ongoing investment we have made in strengthening our distribution and research capabilities.”

James Butterfill, Head of Research at ETF Securities, added: “We expected an improved performance for gold in 2016 and it’s certainly starting to materialise. We believe that Janet Yellen’s testimony today regarding the trajectory for the US Federal Reserve monetary policy and wider central bank monetary policy effectiveness are bringing financial market stability worries to the fore. This comes amid heightened concerns for European bank liquidity, the risk of a Brexit and the uncertainty regarding the US presidency candidates. Consequently, investors are returning to gold as a core diversifier and safe haven investment. Given the increasingly challenging investment and economic environment, we expect this trend to continue.”

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