by Brad Zigler While concerns about U.S. industrial production abound, the manufacturers of futures-based exchange-traded funds and notes are busily cranking out new products. North American providers, though, are pikers compared to the guys across The Pond.
Jersey-based ETF Securities Ltd (http://www.etfsecurities.com/) has plans to launch a new flotilla of 66 so-called exchange-traded commodities [ETCs] to join its already formidable fleet. With the flotation, the ETC armada fielded by ETFS will number 110 portfolios.
For an outfit that came to market with its first offering less than two years ago, this represents truly remarkable growth. The largest U.S.-based provider of exchange-traded funds, Barclays Global Investors, now lists nearly 150 domestic portfolios after entering the fray in earnest seven years ago.
Most remarkable about the new ETFS product launch are the portfolios themselves. They're the world's first short and leveraged futures funds. Leveraged ETCs will enable investors to gain from rising commodity prices with twice the exposure of existing ETCs. Short ETCs, which earn the inverse of the underlying asset's daily return before expenses and interest, will give investors the opportunity to capitalize upon falling commodity prices, eliminating the need to borrow and sell short ETC shares.
The new ETCs will track slices of the Dow Jones-AIG Commodities Index based upon 10 individual commodities, including gold, crude oil and corn, together with 23 sectors such as agriculture, precious metals and energy. The portfolios will be rolled out on the London Stock Exchange over the next few weeks.
And that's the disappointing news for U.S. investors. The door to these novel portfolios will remain closed to Yanks.
That is, of course, until someone on this side of The Pond decides to change things.
And what incentive is there for stateside manufacturers to crank out domestic versions? Well, in the words of ETFS chairman Graham Tuckwell:
"Over the past eight weeks there has been a huge surge in global demand for ETCs ... assets and trading volumes are up over 50%."