Press Release ! Commodity ETPs Back in Favour as Sentiment Turns London, 09 April 2014: Commodities moved back into favour in 1Q 2014, with commodity prices as measured by the DJ-UBS Commodity Index rising by 7% and commodity ETPs seeing their first quarterly inflows after four consecutive quarters of outflows. Total assets invested in commodity ETPs increased to $122.4bn at the end of Q1 2014 from $122.1bn at the end of last year, with precious metals, agriculture and industrial metals seeing the bulk of the inflows. Silver saw the largest inflows during quarter as investors looked to the metal as a leveraged play on improved sentiment towards gold. Nicholas Brooks, Head of research and investment strategy at ETF Securities said: “After seeing selling in January, gold ETPs moved strongly back into favour in February and March as investors revised down their highly bullish US growth assumptions and revised up the global risk outlook. Broad commodity ETPs also saw a turn in sentiment, with asset allocators rotating into the asset class as an alternative to overstretched developed market equities. Platinum ETPs saw strong demand as an extended strike in South Africa raised supply concerns. Coffee and natural gas ETPs, on the other hand, saw aggressive profit-taking as prices of both commodities surged on weather-related supply issues. Oil ETPs also saw strong investor profit taking as the WTI oil price rallied on strong US demand for oil products early in the year.” Key commodity ETP trends in 1Q 2014: • Commodity ETPs see first quarterly inflows in a year. Commodity ETPs received $271mn of net new inflows in 1Q 2014, marking the first increase since Q4 2012. Inflows together with a 7% rise in commodity prices as measured by the DJ-UBS Index helped push commodity ETP AUM to $122.4bn from 122.1bn at the end of Q4 2013. • Silver ETPs see largest inflows, with $354mn of net purchases. Silver was one of the few commodity ETPs to see inflows in every month of the first quarter, following on strong inflows in 2013. It appears that investors view the silver price around the $20/oz level as a good entry point (less than half its 2011 peak) and with silver often viewed as a high beta version of gold, improved sentiment towards the gold price is causing investors to build positions in silver ETPs. • Gold ETPs see strong investor demand in February and March as global risk perceptions rise. Gold ETPs saw the strongest inflows of any other commodity ETP in February and March, with inflows of $322mn and $536mn respectively. Large outflows in January ($946mn), however, meant that for the full quarter there were in fact $88mn of outflows. The strong positive turn in investor sentiment towards gold in February and March was driven by a number of factors. The first was a scaling back of investor bullishness on the growth outlook for the US economy following weak data releases. The second was an upward revision to global economic and political risk assessments following financial and political turmoil in a number of emerging ! markets. Finally, Russia’s take-over of the Crimea and continued concerns of a broader conflict in the Ukraine has caused investors to turn to gold as insurance against further negative political and economic surprises. • Platinum ETPs see strong demand as investors worry about South Africa supplies. An extended strike in South Africa, where over 70% of the world’s platinum supply is sourced, raised concerns of platinum shortages this year, pushing up the price and causing investors to increase allocations to the metal. With few signs of the strike being resolved any time soon, further price gains and inflows seem likely. • Broad commodity ETPs see strong inflows as asset allocators increase commodity allocations. Broad diversified commodity ETPs saw the strongest inflows after silver and gold ETPs in February and March, with net new flows of $324mn and $186mn respectively. These strong inflows were masked in the quarterly figures due to $683mn of outflows in January, with quarterly flows down $173mn. The strong rebound in investor interest in ETPs providing broad commodity exposure indicates a sentiment shift towards the asset class by global asset allocators. With most commodity prices at the end of 2013 well down on peak levels three years ago and developed market equity valuations starting to appear stretched, a number of investors appear to have been rotating into commodities over the past two months. With China having recently announced a new fiscal stimulus program and further easing likely on the way, the sentiment shift towards commodities has the potential to gather further momentum as long as the US economic recovery remains on track. • Agriculture sees strong investor interest as prices rebound. Agriculture ETPs saw a rebound in investor interest in 1Q 2014, with the sector seeing $217mn of inflows. The largest inflows ($182mn) were into broad diversified agriculture ETPs indicating that the bulk of buying was by asset allocators wishing to gain broad exposure to the sector rather than tactical single commodity bets. Of the individual agriculture commodities, corn saw the strongest investor interest, with $109mn of inflows during the quarter. • Coffee ETPs see outflows as investors take profits as Arabica price surges. Following record inflows into coffee ETPs in 2013 as the Arabica coffee price fell close to a seven year low, investors sold $264mn of their long coffee ETP holdings in February and March as the Arabica price surged 70%. Short coffee ETPs have recently started to see increased investor interest. • Natural gas ETPs see profit-taking as Henry Hub price rallies strongly on US cold weather. Natural gas ETPs tend to see range-trading behaviour and 1Q 2014 was no exception. After seeing inflows through much of 2H 2013 when the Henry Hub spot price was loitering around $3.5/MnBtu, as the price spiked up to a peak of $7.98/MnBtu in March 2014, investors took profits heavily, with $218mn leaving natural gas ETPs in March alone. As with coffee, there has been increased interest in short natural gas ETPs recently. Oil ETPs saw large outflows in January 2014 as the WTI oil price surged on US cold weather and inventory drawdowns and investors ! took profits. However, as prices stabilised in February and March, investors moved to the sidelines and oil ETP flows levelled out. Global Commodity ETP Assets and Flows to March 2014 (data to March 31, 2014) Flows ($m)1 Sector Diversified Broad Diversified Diversified - Ex Agriculture & Livestock Diversified - Ex Energy Diversified - Light Energy Agriculture Diversified Cocoa Coffee Corn Cotton Grains Rice Softs Soybeans Soybeans Meal Soybeans Oil Sugar Wheat Energy Diversified Biofuels Carbon Coal Crude Oil Electricity Gasoline Heating Oil Natural Gas Petroleum Industrial Metals Diversified Aluminium Copper Lead Nickel Tin Uranium Zinc Livestock Diversified Lean Hogs Live Cattle Precious Metals Diversified Gold Palladium Platinum Rhodium Silver Total Jan-14 Feb-14 Mar-14 Q1-14 Q4-13 Q1-14 Q4-13 -683 -670 13 -24 -2 35 -74 -1 22 1 -7 -2 0 -2 0 0 -1 91 8 -292 -29 0 -1 0 -224 0 -3 3 -38 0 143 34 4 85 -2 24 9 0 -10 0 -1 1 0 -1,034 -114 -946 -4 -27 5 51 -1,831 324 218 89 18 0 64 38 4 -110 82 8 17 0 -1 0 0 1 9 15 262 -2 0 1 0 39 0 -2 0 226 0 -40 30 0 -77 2 5 0 0 1 2 2 1 0 529 -12 322 -36 34 0 221 1,141 186 147 19 20 0 118 218 5 -154 26 5 1 0 24 -1 0 0 -1 -7 -181 63 0 0 0 -22 0 -3 -1 -218 0 59 14 8 36 -2 3 0 0 0 7 7 -2 3 773 20 536 18 112 5 82 961 -173 -305 121 14 -2 217 182 8 -242 109 6 16 0 21 -1 0 0 99 16 -211 32 0 0 0 -207 0 -8 2 -30 0 162 78 12 44 -2 32 9 0 -9 9 8 0 3 268 -106 -88 -22 119 10 354 271 -673 -672 -2 -1 1 -279 -269 -7 31 1 -9 -26 0 0 -2 0 -6 8 0 -994 3 0 0 0 -640 0 0 0 -358 1 -163 -41 -52 -64 1 0 3 0 -11 -6 -5 0 -1 -5,651 55 -5,730 -23 259 6 -219 -7,766 16,160 15,503 316 311 29 4,059 2,919 77 172 208 63 172 0 54 0 5 33 211 146 5,992 622 0 3 0 3,367 0 62 15 1,915 7 1,460 759 69 463 7 106 21 0 36 106 87 11 9 94,650 904 75,889 1,504 3,832 125 12,395 122,427 16,069 15,575 186 279 29 3,699 2,815 68 234 82 51 168 0 25 32 0 4 87 133 6,834 614 1 3 0 4,076 1 70 13 2,048 8 1,464 748 60 513 7 59 12 6 57 92 76 10 6 93,993 907 75,860 1,419 3,576 90 12,141 122,152 Source: ETF Securities, Bloomberg 1 Excludes price changes over period. END !! About ETF Securities AUM ($m) ! !ETF Securities is one of the world’s leading providers of exchange-traded investment products and a pioneer in exchange-traded commodities. We are dedicated to developing liquid, transparent investment solutions that can be traded on world stock exchanges. The company has a strong history of product innovation and this remains a key tenet of our guiding philosophy. Our management team listed the world’s first gold exchange-traded commodity in 2003, and many other market-leading investment solutions have since followed. Today ETF Securities offers what we believe to be the world’s most comprehensive range of exchange-traded commodities and is responsible for approximately US$19 billion in global investor assets.* !*As at 31 March 2014 !For further information, please contact the press office on: Tel: +44 (0) 20 7448 4330 Email: [email protected] !To learn more about ETF Securities go to: www.etfsecurities.com ! Important Information This document has been provided by ETF Securities (UK) Limited (“ETFS UK”) for access to professional clients and investors only and no other person or entity should rely on the information contained herein. ETFS UK is authorised and regulated by the United Kingdom Financial Conduct Authority ("FCA"). This communication is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment. This document includes independent market commentary prepared by ETFS UK based on publicly available information. It does not constitute financial product advice nor should be construed as an offer for sale or utilised as the basis for any investment decision. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents. The third party data providers used to source the information in this communication make no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data provided nor shall they have liability for any damages of any kind relating to such data. Any trademarks and service marks contained herein are the property of their respective owners. The historical performance included in this document may be based on backtesting, i.e. calculations of how the index might have performed in the past if it had existed. Backtested performance information is purely hypothetical and is provided in this document solely for informational purposes. Backtested data does not represent actual performance and should not be interpreted as an indication of actual performance of an index or the relevant Shares. Index performance does not reflect management fees, transaction costs or other applicable expenses. Indexes are unmanaged and one cannot invest directly in an index. Historical performance is not an indication of future performance and any investments may go down in value. ETFS UK is required by the FCA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit. The financial products referred to in this document may or may not be suitable for a particular investor. This information is not an offer of any financial products and should not be used as the basis for any investment decision. You should obtain your own independent financial, taxation and legal advice before making any decisions about any investment. Investment in the financial products discussed herein carries with it certain risks and reference should be made to the prospectus of the relevant financial product. None of the index providers or indices referred to herein nor their licensors make any warranty or representation whatsoever either as to the result obtained from use of the relevant indices and/or the figures at which such indices stand at any particular day or otherwise. None of the index providers or indices shall be liable to any person for any errors or significant ! delays on the relevant indices nor shall be under any obligation to advise person of any error or significant delay therein.