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ETF Securities Expands Brent Crude Offering

Written by Staff

February 29, 2012 12:40 (CET)

Tensions in the Middle East and a widening gap between the main oil benchmarks have prompted ETF Securities to introduce four new Brent Crude exchange-traded commodities.

The new listings follow an investor poll carried at the issuer’s annual investment conference earlier this year. Three quarters of those surveyed said they expected tensions in the Middle East to escalate and most said this would have an impact on their asset allocation decisions.

Brent Crude has become more important to investors as it has been gaining ground against the other major oil benchmark, West Texas Intermediate, which has traded at a significant discount to Brent Crude in recent times due to logistical issues.

Neil Jamieson, head of UK sales at ETF Securities, said: “Brent has emerged as the reference benchmark for crude oil and is therefore potentially sensitive to developments that could impact international oil supplies.

“Our recent poll shows that investors are understandably concerned about how to position themselves in light of the continued unrest in the Middle East.”

The new products provide investors with long, leveraged, short and forward exposures to Brent Crude and complement the issuer’s existing range of one month, one year, two year and three year exposures.

The ETFS Brent Crude and the ETFS Forward Brent Crude both have a management fee of 0.49 percent. The ETFS Short Brent Crude and ETFS Leveraged Brent Crude have management fees of 0.98 percent.

The new launches track the performance of the Brent Crude sub-indices of the Dow Jones-UBS Commodity IndexSM via fully funded collateralised swaps. The swap counterparties include UBS and Bank of America Merrill Lynch, acting through Merrill Lynch Commodities.

The ETCs have been listed on the London Stock Exchange and cross-listings on Deutsche Boerse are planned in the near future.





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