For more information, please contact the U.S. marketing agent, ETF Securities (US) LLC at 212-918-4954 or visit our website: www.etfsecurities.com
ETF Securities is the first US ETF Sponsor to provide investors with access to a full suite of precious metal ETPs. Investors can now trade physically backed Gold, Silver, Platinum, Palladium and Precious Metals Basket ETPs from the same provider. The 7 precious metal ETPs have the following key features:
- Track spot price of underlying metal less associated management fees. Ordinary brokerage commissions do apply.
- Physically backed by underlying bullion – minimal counterparty risk
- Bullion holdings audited by specialist audit firm biannually – audit reports published on the website at www.etfsecurities.com
are trading on ETFS Physical Swiss Gold Shares (SGOL) and ETFS Physical Silver Shares (SIVR).
The ETFS Gold Trust, ETFS Asian Gold Trust, ETFS Silver Trust, ETFS Palladium Trust, ETFS Platinum Trust, ETFS Precious Metals Basket Trust, and ETFS White Metals Basket Trust are not investment companies registered under the Investment Company Act of 1940 or commodity pools for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Please read the prospectus carefully before investing
Description of Exchange Traded Products
Exchange Traded Products (ETPs)
– the umbrella term used to describe Exchange Traded Funds (ETFs), Exchange Traded Commodities (ETCs), Exchange Traded Notes (ETNs), and US Grantor and other statutory trusts. They are collateralized or uncollateralized open-ended securities listed on a stock exchange tracking an underlying asset.
Exchange Traded Funds (ETFs)
– refer to exchange traded products that are structured and regulated as mutual funds or collective investment schemes. ETFs are registered under The Investment Company Act of 1940. Currently, ETFs rely on physical delivery of the underlying assets through the creation and redemption process.
Exchange Traded Commodities (ETCs)
– trade and settle like ETFs but are structured as debt instruments. They track both broad and single commodity indices. ETCs either physically and hold the underlying commodity (e.g. physical gold) or get their exposure through fully collateralized swaps.
Exchange Traded Notes (ETNs)
– are similar to ETCs except they are not collateralized, which means that an investor in an ETN will be fully exposed to issuer credit risk.
U.S. Grantor and Statutory Trusts
– A grantor trust may hold a defined set of assets plus a small amount of cash. They are usually used to hold precious or industrial metals in the United States. Statutory trusts may hold a wider range of commodities and my hold derivative assets (i.e., swaps & futures). Grantor and statutory trusts are often referred to as ETFs but differ in that they are registered under the Security Act of 1933 and not the Investment Company Act of 1940.
Risks and Important Considerations
The value of the Shares relates directly to the value of the gold, silver, palladium and platinum held by the Trusts and fluctuations in the price of gold, silver, palladium and platinum could materially adversely affect an investment in the Shares. Several factors may affect the price of gold, silver, palladium and platinum, including: A change in economic conditions, such as a recession, can adversely affect the price of gold, silver, palladium and platinum. Gold, silver, palladium and platinum are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares; Investors' expectations with respect to the rate of inflation; Currency exchange rates; Interest rates; Investment and trading activities of hedge funds and commodity funds; and global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of bullion producing companies, it could cause a decline in world prices, adversely affecting the price of the Shares. Also, should the speculative community take a negative view towards bullion, it could cause a decline in world gold, silver, palladium and platinum prices, negatively impacting the price of the Shares. There is a risk that part or all of the Trust's gold, silver, palladium and platinum could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts. Investments in the trusts do not constitute a direct investment in the underlying metals.