ETF Securities, a London-based provider of exchange-traded funds, is planning a major push into the U.S. market with the launch of 18 commodities-based ETFs and a precious-metals basket ETF.
As of now, the firm markets just four ETFs in the U.S, all launched this year. But the company wants to expand its offerings in response to investor and adviser demand for commodities, which aren't correlated to the markets, said Will Rhind, strategic director.
While there has been much attention paid to gold of late, investors and advisers realize that other commodities are also worth looking at, he said.
“The demand for commodities will last as people seek a safe haven that isn't in the form of paper,” Mr. Rhind said.
According to a filing with the Securities and Exchange Commission, the ETFs will take long, short and leveraged positions on an array of commodities such as natural gas, wheat, copper and gold. The precious-metals basket will include silver, platinum and palladium. The latter two, which are industrial metals used in cars, will continue to be good investments as auto sales increase, Mr. Rhind said. He declined to comment on the filings.
ETF Securities, which has long been an exchange-traded-fund player in Europe, has $1.6 billion in the four ETFs it offers in the United States. Expanding its lineup makes sense because more advisers are looking to ETFs to help increase their commodities exposure, said Tom Lydon, a registered investment adviser and president of Global Trends Investments.
“Five years ago, the only way the average adviser could invest in commodities was through mutual funds or through the stock of a mining company,” Mr. Lydon said.
Last summer, the
Financial Industry Regulatory Authority Inc. triggered a wave of concern about leveraged and inverse ETFs when it issued a warning about using the products for longer than one day.
But the fact that ETF Securities is planning to launch leveraged exchange-traded funds proves that there is adviser demand for these offerings, Mr. Lydon said.
