London, 14 April 2011

Commodity ETP assets under management (AUM) rose to a new all-time high of US$174bn in Q1 2011, up from US$163bn the previous quarter and US$110bn in Q1 2010, a 58% year on year increase. These findings come from today's publication of ETF Securities' Global Commodity ETP Quarterly for Q1 2011, a comprehensive guide to investing in global commodity ETPs.

Key findings from ETF Securities' Global Commodity ETP Quarterly for Q1 2011 include:

• Total AUM in commodity ETPs for Q1 2011 reached a record high of $174bn, up by US$10.2bn from the previous quarter. Sales flows for Q1 were US$3.5bn with broad commodity and agriculture ETPs seeing the strongest demand.

• Diversified broad commodity ETPs saw the largest inflows in Q1, with US$2.6bn of new investments as investors sought to gain exposure to the general rise in commodity prices, hedge against inflation and diversify their portfolios. Some of the flows appeared to be switches out of emerging market ETFs as investors looked for exposure to emerging market demand growth while reducing their exposure to broad equity market, political and company-specific risks.

• Agriculture ETPs saw the next largest inflows, with US$2.0bn of new investments as historically low inventories for many agriculture commodities and a desire to hedge against further food price inflation attracted investors to the sector.  Inflows were focused in diversified basket ETPs (US$1.4bn) and cotton was the most popular individual agriculture ETP (US$141mn).

• In a reversal of 2010 trends, gold saw US$1.9bn of outflows in Q1. Almost all of the outflows occurred in January, driven by expectations of higher global interest rates and reduced perceptions of financial and political risk. However, peripheral European sovereign debt problems, Middle East and North Africa political instability and rising inflation concerns in February and March caused investors to move back into gold and pushed the gold price to a new high. In March gold inflows rebounded strongly, surging by US$958mn.

• Silver, one of the strongest performing commodities in Q1, saw strong inflows of US$889mn as investors were attracted to its combination of safe haven and industrial properties. Industrial metals saw US$286mn of inflows, with most focused on diversified baskets (US$166mn). Tin was the most popular individual industrial metal ETP (US$94mn)

• Within energy, oil ETPs saw inflows rise sharply as Middle East unrest picked up in January and February, though some of those flows reversed in March, leaving oil ETP inflows up US$183mn in 1Q.  Investors appeared to take the rise in natural gas prices in Q1 2011 as an opportunity to reduce positions, with outflows of US$955mn in Q1.

Commenting, Nicholas Brooks, Head of Research and Investment Strategy, said: "Global commodity ETP assets rose to US$174bn by the end of the first quarter of 2011, a new record high.  Total assets rose US$10.2bn during the quarter with diversified broad commodity ETPs accounting for over half of the increase.  Strong demand for diversified exposure to commodities appears to be being driven by investors demand not just for portfolio diversification, but also for plays on emerging market growth without taking on the political and equity-specific risks that come with investing in emerging markets equities.  A number of investors are also using commodity ETPs as a direct way to hedge their portfolios against sharply rising food and energy price inflation.  Gold ETPs saw large outflows in January but flows reversed and rose by nearly US$1bn in March as perceptions of global political, financial and inflation risks rose sharply."

Summary of Commodity ETP global sales and AUM

Source: ETF Securities, Bloomberg; 1. Excludes price changes over period.

Ends --

ETF Securities' Global Commodity ETP Quarterly is a report looking at key statistics and details the large and growing choice of commodity ETP exposures and strategies around the world.  It seeks to explain the key factors driving commodity ETP performance, reviews emerging trends and highlights key risks and potential opportunities within the sector. www.etfsecurities.com