ETF Securities Considers IPO and Launches 3 ETCs

ETF TIMES: ETF Securities added aluminium, zinc and lead funds to its fleet of ETCs in addition to discussing a possible flotation

Ben Johnson 10 May, 2011 | 5:00PM
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ETF News: May 2-6
ETF Securities May be Seeking Flotation
Financial News reported that ETF Securities has retained Citigroup and Bank of America Merrill Lynch to discuss its strategic options—including a possible initial public offering (IPO). While the firm is not short on cash, an IPO would provide current investors, including majority-owner and founder Graham Tuckwell a chance to monetise their holdings. Should it go through with a listing, ETF Securities would be just the second publicly traded pure-play exchange-traded product provider, joining US-based ETF provider Wisdom Tree.

New Launches
ETF Securities has expanded its offering of physically-backed industrial metals exchange-traded commodities (ETCs). The firm launched the ETFS Physical Aluminum, ETFS Physical Lead, and ETFS Physical Zincs ETCs on the London Stock Exchange last Tuesday. The three ETCs join ETFS Physical Copper, ETFS Physical Nickel, and ETFS Physical Tin, which were launched last August. As we highlighted in our December article, “Much ado About Copper” it is important that prospective investors understand the all-in carrying costs for these products (as investors are responsible for storage and insurance fees in addition to the product’s management fee) as well as how they might perform versus an investment in futures contracts tied to these metals.

New Listings
HSBC listed a pair of exchange-traded funds (ETFs) on the Euronext Paris exchange. The HSBC MSCI World ETF will trade in euros on the Paris exchange. The physically-backed fund levies a total expense ratio (TER) of 0.35%. The HSBC MSCI Turkey ETF is also a physical replication fund, trades in euros, and has a TER of 0.60%.

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Ben Johnson

Ben Johnson  is director of passive funds research at Morningstar.