ETF Securities Launches Base Metals Funds


"Copper has a lot of room to grow when it comes to institutional investment."

UK-based ETF Securities said on Monday it would launch exchange-traded products for base metals, as it seeks to tap into a global market worth nearly $120 billion (75.6 billion pounds) that has been dominated by investment in gold.

The new products will include copper, aluminium, zinc, nickel, lead and tin as well as a basket of all six major base metals, although no launch date has yet been set.

"This new platform is intended to provide investors with exposure to physical industrial metal without the need to purchase and store such metal directly," said Graham Tuckwell, chairman and CEO of ETF Securities.

"These products will complement our existing offerings which are priced off futures prices rather than cash market prices."

A spokeswoman for the company said there had been no decision as yet on where the products would be listed, but in a news release the company said further information on the products would be published in the future, subject to approval from relevant regulators and the London Stock Exchange.

Deutsche Bank, which will provide trading, administrative and custody services of the fund, said exchange-traded products backed by copper could hold 300,000 to 400,000 tons of metal, which is roughly 2.2% of global refined copper demand.

"There is no question copper is the winner in new ETPs among other base metals. It is the red gold because it is still driven by fundamentals and demand/supply balances are looking good in the long-term," said one fund manager, who declined to be named.

"The other base metals lack the volume and positive fundamentals. Copper has a lot of room to grow when it comes to institutional investment."

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