London, 26 May 2010

Source, the specialist provider of Exchange Traded Products (ETPs) working in partnership with BofA Merrill Lynch, Credit Suisse, Goldman Sachs, J.P. Morgan, Morgan Stanley, Nomura, Nyenburgh and 14 market makers, is pleased to announce that total assets in its Exchange Traded Commodities (ETCs) platform have passed EUR 500 million since launch in April 2009 and have doubled in size since the start of 2010. 

Source listed 27 T-ETCs (US Treasury-Bill secured ETCs) on Deutsche Börse (Xetra) and 1 physical gold P-ETC (Physically secured ETC) on the London Stock Exchange last year, making it the second largest provider of collateralised ETCs in Europe.

Ted Hood, CEO of Source, commented, “We are very pleased with the progress to date in delivering quality commodity products to our clients.  Our simple message, focused on transparency, unparalleled collateral quality and efficient delivery of commodity exposure, is clearly resonating with the European institutional investment community.”  Source’s T-ETCs are collateralised with US Treasury Bills and the swaps are diversified across multiple counterparts. This robust structure has resonated well with clients.

The near doubling of Source ETC assets since the start of 2010 has been led by the Source Physical Gold P-ETC (SGLD listed on the LSE). This has now reached US$370 million in total assets, capturing over US$100 million of inflows alone in the month of April as investors increased allocations to gold as a safe haven asset.  Investors have noted that SGLD is the most cost efficient physical gold ETP listed in Europe.  With an all-in annual management fee of 0.29%, SGLD is significantly less expensive than competing products and offers investors a secure way to access the gold market.  The Source Physical Gold P-ETC is secured by gold bullion held in J.P. Morgan Chase Bank's London vaults.

Furthermore, in response to investor demand for enhanced commodity index exposure, Source launched a Crude Oil Enhanced T-ETC (SEWTI listed on Xetra) – YTD 2010 inflows have totalled over US$70 million.  Over the past few years, the performance of conventional front-month future tracking oil ETPs has varied dramatically from the spot price of oil.  SEWTI is designed to track the S&P GSCI Crude Oil Enhanced Total Return index, an enhanced index that adjusts its exposure to the futures curve on a monthly basis, dynamically moving between the front month and 6 month NYMEX WTI futures contract depending upon the steepness of the curve.

Top 5 Source ETCs by Total Assets Outstanding (TAO):

Source T-ETCs

Source T-ETCs are secured by US Treasury Bills and cash and are designed to track the S&P GSCI family of commodity indices which include broad, sector and individual commodity indices such as cotton, crude oil or sugar.  Source T-ETCs are listed and traded on the Deutsche Börse (Xetra).

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