ETCs - Underlying credit risk

You should be aware that there are different types of counterparty risk relating to ETCs:

• Physically-backed Precious Metal ETCs i.e. where the products are 100% backed by allocated bullion held with HSBC (the actual physical metal itself is held in safe custody) and therefore carry no credit risk

• Oil and carbon ETCs backed by Shell, where investors are taking on Shell credit risk when they invest in a product

• ETCs 100% backed by collateral i.e. where collateral (an asset that has been pledged as a security for the product) is held with the Bank of New York Mellon in a separate account and is adjusted daily.  In the event that the commodity counterparty defaults on its obligations, ETFS Commodity Securities Ltd (on behalf of investors) would be the sole beneficiary of the collateral.


ETCs
Issuer
 Credit risk

Gold Bullion Securities
ETFS Physical Gold
ETFS Physical Palladium
ETFS Physical Platinum
ETFS Physical PM Basket
ETFS Physical Silver
ETFS Physical Swiss Gold

 


 Gold Bullion Securities Ltd and ETFS Metal Securities Ltd 100% backed with allocated bullion, no credit risk
ETFS Carbon
ETFS Brent 1mth
ETFS Brent 1yr
ETFS WTI 2nd mth
 ETFS Oil Securities Ltd Shell credit

All other ETCs, including:


ETFS Energy DJ-UBSCISM
ETFS Precious Metals DJ-UBSCISM
ETFS Forward Agriculture DJ-UBSCI-F3SM
ETFS Forward Industrial Metals DJ-UBSCI-F3SM
ETFS Crude Oil
ETFS Heating Oil
ETFS Live Cattle
ETFS Nickel
ETFS Silver
ETFS Soybeans
Short and Leveraged ETCs

 ETFS Commodity Securities Ltd 100% collateralised, collateral posted by UBS with the Bank of New York Mellon