ETF Securities, the exchange-traded funds provider, says that its precious metals exchange-traded commodities (ETCs) surged by 400% in the first quarter of this year, breaking the company’s previous records. Precious metal prices rose in tandem with increased interest from investors.
Physical metal ETCs proved especially popular. They are backed 100% by allocated metal in a vault, avoiding bank credit risk and providing liquidity, easy access and no risk of shortages, says the firm. They are also sharia-compliant.
Investors continued their flight to gold, with inflows into physical gold ETC holdings increasing by a factor of 3.7 in the first quarter of 2009 over the final quarter of 2009. The ETFs Physical Gold and Gold Bullion Securities hold $6.5 billion (£4.4 billion) of gold between them.
But other metals also proved popular. The company’s smaller silver holdings increased by 4.8 times over the previous quarter to total $212m.
Platinum holdings rose 82% over their level at the end of 2008 to $372m. During the first quarter of 2009, the platinum price rose 25%.
The Physical PM Basket vehicle, backed by a basket of gold, silver, platinum and palladium, saw total holdings rise by 33.7% over the end of 2008.
ETF Securities has over $10 billion in assets and offers a mix of physical, long, forward, leveraged and short exposure to different commodity sectors.