expected to begin next week. Currencies are the most liquid asset class with over $3.2 trillion of trading each day yet it is one of the last asset classes to be packaged in the form of an exchange traded product. ETF Securities launched the world’s first Commodity ETC platform in Europe between 2003 and 2006 and which now has accumulated over $15 billion in assets and recent trading of approximately $1.4 billion per week,” Automated Trader Reports.
“Initially, 18 Currency ETCs will be listed on the London Stock Exchange (LSE) which will track recently launched MSFX Currency IndicesSM. The initial Currency ETCs provide long or short passive exposure to G10 currencies versus the US Dollar and include AUD, CAD, CHF, EUR, GBP, NOK, NZK, SEK and YEN. The ETCs also provide exposure to local interest rates in addition to FX movements between the relevant Currency and US Dollars. The new Currency ETCs will be fully collateralised in order to mitigate counter-party risk and will be listed in the ETC segment of the LSE,” Automated Trader Reports.
Nik Bienkowski, Chief Operating Officer, commenting on this innovative launch said: “Our investors have demanded access to new asset classes in a liquid and secure package. Currency ETCs will deliver this through an open-ended exchange traded security which is fully collateralised and available through ordinary brokerage accounts. After the events of the past year, transparency and security have been demanded by our investors and as a result of the ETC structure, assets in our Commodity ETC platform have increased by over $9 billion this year to reach $15 billion with recent weekly trading volumes of $1.4 billion.”
“ETF Securities’ Currency ETC platform provides 18 long and short Collateralised Currency Securities with exposure to G-10 currencies. Currencies have been one of the best performing asset classes, along with commodities, over the past 1 year, 3 years and 5 years. Currencies also have low correlation to other asset classes and low volatility, making currencies an asset which can improve portfolio performance through increased diversification. Currencies are the most liquid class available while Currency ETCs also provide access to local interest rates, which have averaged around 5% per annum over the past five years in the case of the Australian Dollar.”