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ETF Securities Seeks to Expand


ETF Securities , a purveyor of physically backed precious metals exchange traded funds, will be expanding its global reach and may even work on currency-related products.

Matt Johnson, head of distribution for EMEA, said the company will focus on expanding its product range and broadening its client pool, reports Chris Flood for Financial Times.

Given the “natural fit” between currency and commodity products, Johnson wants to implement greater investor education to help “create a framework” that would allow investors to understand how these tools can augment their asset allocation strategies.

Moreover, he hinted that ETF Securities would launch currency related ETFs to help investors create momentum or carry trading strategies in the Forex markets.

The fund provider has been quickly expanding its global reach, launching physically backed precious metal ETFs in Hong Kong and Australia last year as a response to the growing appetite for commodity ETFs in Asia. The growing interest for commodity ETFs has been a reaction to extensive quantitative easing and low returns in the bond market.

Additionally, Johnson anticipates that new regulatory changes to commodity swaps, or over-the-counter derivative contracts, would force some managers to switch into commodity ETFs.

According to ETFGI, commodity exchange traded products, which include ETFs and exchange traded notes, attracted $23 billion in new inflows over 2012, a 52.3% rise over the $15.1 accumulated in 2011.

“Absolute demand for commodities will continue to increase and the marginal cost of supply will also rise further,” Nicholas Brooks, head of research and investment strategy, said in the article. [Gold Coin Sales Keep Falling as Investors Buy Bullion ETFs]

For more information on the ETF industry, visit our current affairs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.