ETF Securities USA LLC (ETFS) based on recent client and press inquiries clarified today that the expense ratios for SGOL and SIVR will remain unchanged and not increase. Total AUM for ETFS Physical Swiss Gold Shares (SGOL) and the ETFS Physical Silver Shares (SIVR) now exceeds $540m as of December 8, 2009. The speculation follows the recent news that Powershares DB are raising the expense ratios on PowerShares DB Gold Fund (NYSEArca: DGL) and PowerShares DB Silver Fund (NYSEArca: DBS) will go from 0.50 percent to 0.75 percent.
Globally, ETF Securities’ assets under management (AUM) have moved to an all-time high of $17bn due to strong investor interest in hard assets(5) with increased government debt levels and aggressive quantitative easing policies raise concerns about the outlook for the US dollar, British pound, other major currencies and medium-term inflation risks. AUM has increased by $10bn this year, with 65% of the increase driven by investor inflows, as ETF Securities expanded its geographical coverage with precious metal product listings on the New York Stock Exchange and the Tokyo Stock Exchange (NYSE Arca and TSE).
Flows into the physically backed gold products have shown low sensitivity to downward movements in the gold price (ie flows tend to remain firm even during periods when the gold price has dropped sharply) highlighting that ETF Securities thinks the largest buyers of gold Exchange Traded Funds (ETFs) are institutional investors buying the metal as a long-term hedge against inflation, US dollar depreciation and other risks, rather than as short term trading instruments. ETF Securities believes the trend into ETF holdings signifies that most large investors’ think these risks may continue to rise.
Commenting on this milestone for ETF Securities in the US, Fred Jheon, Head of Product and Business Development for ETFS Marketing LLC, commented:
“Investor adoption to commodity investing continues to increase and gain momentum at both institutional and retail levels. We are delighted to see good net flows into both of our products since launch. SGOL and SIVR are well positioned as being the lowest-cost physically backed precious metal products in the US and for SGOL we couple this cost savings to investors by providing diversification benefits from Swiss vaulting. We believe that these significant expense ratio increases by competitor products that use derivatives and not metal only further enhance the attractiveness of the ETF Securities offering.”
Notes to editors:
ETFS Physical Swiss Gold Shares (SGOL) began trading on the NYSE ARCA on September 9th, 2009. The objective of the newly listed shares is to reflect the performance of the price of Gold bullion, less the Trust’s operating expenses. The Trust is open ended and is designed for investors who want a cost-effective(1) and convenient(2) way to invest in Gold as well as diversify their Gold holdings. The highlights of the new offering are:
- Gold stored in Switzerland: ETFS Physical Swiss Gold Shares (SGOL) will custody all of its physical gold bullion in secure LBMA approved vaults in Zurich, Switzerland offering diversification benefits across issuer, custodian and geographies.
- Physically-backed: ETFS Physical Swiss Gold Shares (SGOL) are backed by allocated physical gold bullion that meets London Bullion Market Association (LBMA) “good delivery”(4)standards.
- Low cost: ETFS Physical Swiss Gold Shares (SGOL) expense ratio of 0.39% is the lowest priced physically-backed gold product offered in the US ETF market(3)
- Transparent: Gold bars underlying ETFS Physical Swiss Gold Shares (SGOL) will undergo a bi-annual inspection performed by an independent external auditor. All Gold bar identification numbers will be published on www.etfsecurities.com
ETFS Physical Silver Shares (SIVR) began trading on the NYSE ARCA on July 24, 2009. The objective of the newly listed shares is to reflect the performance of the price of silver bullion, less the Trust’s operating expenses. The Trust is open ended and is designed for investors who want a cost-effective(1) and convenient(2) way to invest in silver as well as diversify their silver holdings.
The highlights of the new offering are:
- Physically-backed: ETFS Silver Trust’s shares represent interest in physical silver bullion held in a London Bullion Market Association (LBMA) approved secured vault
- Expense Ratio: ETFS Silver Trust introduced with an expense ratio of 0.30% p.a. until July 24, 2010, capped at maximum of 0.45% thereafter (3)
- Competitively Priced: ETFS Silver Trust expense ratio is one of the lowest priced physically-backed silver product in the US exchange traded product market
- Records: All silver bar numbers published daily to: www.etfsecurities.com
ETFS Physical Silver Shares are issued by the ETFS Silver Trust. And ETFS Physical Swiss Gold Shares are issued by the ETFS Gold Trust.
For more information on the new issue or ETF Securities please contact the US marketing agent, ETFS Marketing on 212-918-4954 or visit our website: www.etfsecurities.com
The ETFS Gold Trust and ETFS Silver Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Please read the prospectus carefully before investing.
(1) The Sponsor expects that, for many investors, costs associated with buying and selling the Shares in the secondary market and the payment of the Trusts ongoing expenses will be lower than the costs associated with buying, selling, storing and insuring Gold and Silver bullion in a traditional allocated Gold and Silver bullion account.
(2) The Shares will trade on the NYSE Arca and will provide institutional and retail investors with indirect access to the Gold and Silver bullion market.
(3) Ordinary brokerage fees do apply.
(4) The LBMA Good Delivery list represents the de facto standard for the quality of gold and silver bars. Stringent criteria for assaying standards and specifications for weight, dimensions, fineness/purity that identify and validate marks and appearance of gold bars must be met to qualify as being London Good Delivery bar.
(5)Hard Assets refers to tangibles such as commodities.
(6)Synthetic exposure is achieving the return characteristics via derivatives like futures or swaps. This is in contrast to SGOL and SIVR, which obtain exposure directly with the physical bullion.
Fred Jheon is a registered representative of ALPS Distributors Inc.
For more information on the new issue or ETF Securities, please contact the US marketing agent, ETFS Marketing at 212-918-4954 or visit our website: www.etfsecurities.com
Risks and Important Considerations
The value of the Shares relates directly to the value of the gold and silver held by the Trusts and fluctuations in the price of gold and silver could materially adversely affect an investment in the Shares. Several factors may affect the price of gold and silver, including: A change in economic conditions, such as a recession, can adversely affect the price of gold and silver. Gold and silver are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares; Investors' expectations with respect to the rate of inflation; Currency exchange rates; Interest rates; Investment and trading activities of hedge funds and commodity funds; and global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of bullion producing companies, it could cause a decline in world prices, adversely affecting the price of the Shares. Also, should the speculative community take a negative view towards bullion, it could cause a decline in world gold and silver prices, negatively impacting the price of the Shares. There is a risk that part or all of the Trust's Gold and Silver could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts.
The Trusts are new and have limited operating history. Commodities generally are volatile and are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility. Please refer to the prospectus for complete information regarding all risks associated with the Trusts.
Shares in the Trusts are not FDIC insured, may lose value and have no bank guarantee.
This material must be accompanied or preceded by a prospectus. Please read the prospectus carefully before investing. Click here to review the prospectus.
ALPS Distributors, Inc. is the marketing agent for ETFS Gold Trust and ETFS Silver Trust. ETF Securities Ltd. or its affiliates is not affiliated with ALPS Distributors, Inc. Certain marketing services may be provided for ETFS Gold Trust and ETFS Silver Trust by ETFS Marketing LLC.
Although Shares of the Trust may be bought and sold on the exchange through any brokerage account, they are not individually redeemable directly from the Trust. Investors may acquire Shares and tender them for redemption through the Trust in Basket aggregation only. Please see the prospectus for more details.
This press release contains “forward-looking statements” with respect to results of operations, plans, objectives, future performance and business. Statements preceded by, followed by or that include words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or similar expressions are intended to identify some of the forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are included, along with the statement, for purposes of complying with the safe harbor provisions of that Act. All statements (other than statements of historical fact) included in this press release that address activities, events or developments that will or may occurring the future, including such matters as changes in commodity prices and market conditions (for Gold and the Shares), the Trusts operations, the Sponsors plans and references to the Trusts future success and other similar matters are forward looking statements. These statements are only predictions. Actual events or results may differ materially.
Stephanie Lowenthal, 212-754-5415
Helen Burden, +44 20 7448 4336
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