Tokyo, 19 March 2010

ETF Securities Ltd, the world pioneer of Exchange Traded Products (ETPs), today launched 14 separate Commodity ETFs, comprising 9 individual securities and 5 index securities, on the Tokyo Stock Exchange. The first dealings in these securities on the Tokyo Stock Exchange (TSE) commenced today, March 19th 2010.

The new listing compliments the successfully launched physically backed ETP precious metals platform on the Tokyo Stock Exchange on August 24, 2009. This marked the first time investors were able to get exposure to silver, platinum, palladium or a precious metals basket in Japan. The platform also includes gold, which is ETF Securities’ most successful Commodity ETF.

This ground-breaking launch from ETF Securities puts Tokyo on the map as a centre for commodity trading in Asia and Pacific, giving investors access to more individual commodities on a single exchange, tradable in the same time zone, than anywhere else in Asia and the Pacific. Until now, no single exchange in Asia and the Pacific has covered all the world’s major commodities or commodity groups (energy, agriculture, precious metals, and industrial metals).

Similar to Exchange Traded Funds, Commodity ETFs are liquid, accessible and simple. Commodity ETFs can be created and redeemed on a continuous basis by market makers, matching the liquidity of the underlying markets. Commodity ETFs are openended securities which can be bought and sold intraday by investors on a regulated exchange in the same way as any equity. They provide accurate and transparent commodity exposure to recognised benchmarks in a single trade. In addition, Commodity ETFs require no trading or management of futures contracts as Commodity ETFs are simply priced off new commodity indices published by Dow Jones Indexes.

Investors can buy and sell the new Commodity ETFs through regulated brokers or approved market makers. Commodity ETFs can be traded with all the same order types available to equities, including market and limit orders (Exchanges do not accept stop orders in Japan). They can also be shorted through stock borrowing. The settlement is T+3 (trade date plus three business days) in Japan.

Commenting on the launch of the Commodity ETFs, Atsushi Saito, president and CEO of the Tokyo Stock Exchange, said: “With the listing of these 14 commodity ETFs, we have expanded the range of ETF-based commodity investment options to include energy, precious metals, and agricultural produce. TSE will continue to work toward meeting the varied needs of investors and diversifying our listed- ETFs in order to further increase our market’s appeal and convenience.”

Commenting on the launch of the Commodity ETFs, Graham Tuckwell, Chairman of ETF Securities, said: “We designed Commodity ETFs to be simple and secure, open-ended securities. They have lowered many of the barriers that previously prevented some investors from investing in commodities including access, trading and operational risks, custody, and transaction costs. Commodity ETFs also provide a pure way of tracking a commodity rather than trying to replicate exposure by trading shares of commodity companies – many of which do not correlate to the underlying commodity, if available at all.

“Commodity ETFs do not involve any of the difficulties with buying and then managing a futures position - such as worrying about margin calls, contracts expiring and rolling positions - or in buying and storing physical commodities. The new securities track indices created by Dow Jones Indexes and each individual commodity index tracks a designated futures contract and is designed to reflect the returns from investing in commodities.”

Nobiru Adachi, representative in Japan of ETF Securities, said: “Commodities have consistently shown a low correlation to both equities and bonds, providing strong diversification benefits, while correlations between individual equity markets, hedge funds and real estate returns are high and therefore provide only limited diversification benefit. Commodities have provided similar average returns and volatility to equities over long time horizons. Commodities provide a natural global inflation hedge and often an effective “event” hedge. The characteristics of commodities have led investors globally to accept commodities as the leader of alternatives and commodity ETFs, which allow simple, direct and cost-effective entry to commodity markets and are revolutionizing the investment landscape. Japan’s ETF market is still in its infancy, well behind the US and Europe in size and diversity of investment options. This, however, will change quickly as investors in Japan embrace these convenient and cost-effective tools for implementing wide-ranging strategic and tactical investment strategies.”

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