U.K. Fund Manager Programs U.S. Push in Commodity ETFs

By Garmhausen, Steve | American Banker, December 7, 2010 | Go to article overview

U.K. Fund Manager Programs U.S. Push in Commodity ETFs


Garmhausen, Steve, American Banker


Byline: Steve Garmhausen

A London-based pioneer in commodity exchange-traded funds has quickly made a splash in the United States and says he plans to become a force here.

"Our mission is quite simple," said William Rhind, the strategic director for U.S. business development at ETF Securities Ltd. "We want to be the leading provider of commodity ETFs in the U.S."

Since its debut in 2009, ETF Securities USA has introduced five exchange-traded products and gathered $2.8 billion in assets. The company has 19 more commodity funds in registration.

ETF Securities has a significant presence in Europe, with about 200 exchange-traded products and $24 billion of assets under management, most of it invested in commodity products. Its exchange-traded products are traded in five currencies and listed on nine exchanges.

The company's founder, Graham Tuckwell, developed the world's first Gold ETF, in Australia in 2003, and brought it to the U.K. the next year.

In the United States, ETF Securities has funds that focus on gold, silver, platinum and palladium. To differentiate its gold ETF from U.S.-based rivals, the company backs its shares with gold bars that are acquired as needed and stored in Switzerland.

The company uses an independent inspector to verify the contents of its vaults twice a year. One inspection is scheduled, and the other is random, said Rhind.

Far and away the most popular gold ETF is State Street Global Advisors' SPDR Gold Trust, whose assets recently totaled $55.8 billion.

ETF Securities created its gold fund with an eye toward history. During the Great Depression, the federal government confiscated privately owned gold. This has never happened in Switzerland, Rhind has noted. Investors can find daily updates on ETF Securities' website about the bars of gold and other precious metals held in storage for the company.

"We believe we're the most transparent out there," said Rhind.

ETF Securities also competes on price, offering low management fees for its gold and silver funds. It has the first platinum and palladium ETFs available in the United States, and its "GLTR" basket is unique as well.

Recently, ETF Securities introduced the first U. …

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U.K. Fund Manager Programs U.S. Push in Commodity ETFs
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