The FINANCIAL — The London Stock Exchange last week welcomed nine new Exchange Traded Commodities (ETCs) to its dedicated commodities market segment. The new ETCs, issued by ETF Securities, are the first in the world to track the Dow Jones-AIG Commodity 3 Month Forward Indices, providing investors with access to longer-dated commodities futures contracts.
The Exchange also announced that from 29 October 10 ETCs will be available for multicurrency trading, enabling investors to trade ETCs in sterling for the first time as well as in US dollars. This will offer benefits for UK investors in particular by removing the need for currency exchange.
David Shrimpton, Head of Product Management and Development at the London Stock Exchange, said: "Since we launched our dedicated Exchange Traded Commodities segment just over a year ago we have welcomed a wide variety of innovative new products which have given investors choice and flexibility in their commodities trading strategies. I am sure that these new ETCs and the availability of multicurrency trading will, by expanding that choice still further, contribute to the growth of a market which has seen nearly £4.5 billion worth of trading during the past year.”
Among the new securities issued are forward ETCs based on sectors which have proved particularly popular with commodities investors over the past year, including the agriculture, petroleum and grain markets. There are 52 ETCs on the London Stock Exchange, including individual commodities and commodity indices based on futures prices, as well as the ETFS Gold, Platinum, Palladium, Silver and Precious Metals basket ETCs and the Lyxor Gold Bullion Security which are all based on physical underlyings.
The Exchange’s ETC market segment builds on the success of the Exchange Traded Gold product, which has been traded on the Exchange since 2004. Last month the average daily value traded in ETCs on the London Stock Exchange reached nearly £28 million, a twenty-twofold increase on the same month last year. In September, the total valued traded in ETCs reached £500 million.
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