June 2012 monthly sales presentation usd mexico

Monthly Commodity Themes

June 2012

� Product Offering……………………………………………………………………………………….....................

� The Macro Context…………………......………………………………………………............................................................

� Scenario Analysis: What performs when growth is falling?.……………………............................................................

Contents

� Scenario Analysis: What performs when growth is falling?.……………………............................................................

� What’s driving the gold price and 2012/13 outlook..........................................................................................................

� Using a physical precious metals basket as a portfolio diversifier…………………..........................................................

� Platinum and Palladium: the industrial precious metals...................................................................................................

� Copper: Canary in the coalmine......................................................................................................................................

� Hedged Commodity ETPs – How do they work and how can they be used? ................................................................� Performance Tables...………………….………………………………………………………………………...................….....

Equities………………………………………………………………………………...................................…..............................................…..

- Commodities………………………………………………………...……………………...................................................................................

For Professional Investors Only, Not For Public Dis semination

- Commodities………………………………………………………...……………………...................................................................................

FX……………………………………………………………………………………………….............................................................................

� Appendix

- (1) Scenario Analysis: What Performs When Growth is Rising?..................................…....................................................................…...

•

Our product offerings

Diversified BroadAgriculture US EquitiesLong or Short

Commodity ETCs Equity ETFsCurrency ETCs

AgricultureIndustrial MetalsEnergyLivestockPrecious Metals

US EquitiesCommoditiesEuropean EquitiesThematic Equities

Long or Short USD/EUR/GBP vs G10USD vs EMs (CNY & INR)

Long (1x)

Short (-1x) Short (-1x) Double Short (-2x)

Long (1x)Long (1x)


Forward (1x)

Double Leveraged (2x)

Physical (1x)

Double Leveraged (2x)

Triple Short (-3x)

Triple Long (3x)

These products are listed on one or more of the fol lowing exchanges: London, New York, Tokyo, Frankfur t, Amsterdam, Paris, Sydney, Milan and Dublin

ETPs: a practical primer to product structure

Exchange Traded Product• Intra day trading on exchange

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or a bank balance sheet.

Collateralised• Hold less than 100% of the

constituent assets

• Use collateral to cover risks

arising from securities lending or

swap exposure


swap exposure

• ETFS Metal Securities

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• Gold Bullion Securities

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• ETFS Industrial Metal

Securities Limited

• ETFS Commodities

Securities Limited

• ETFS Foreign Exchange

Limited

• ETFS Oil Securities Limited

ETCsInstrument to facilitate investment in commodities

� Increased demand for commodities exposure

� Limited investment options to invest in commodities becauseEuropean Undertakings for Collective Investment in

The Challenge

Investor Demand

European Undertakings for Collective Investment inTransferable Securities funds (UCITS) are not allowed to investin physical commodities or derivatives directly and they need tobe diversified

� There is a need for a new exchange traded instrument toprovide a simple access to commodities in a more flexible way(single commodity) with close correlation to the underlying

The Challenge

Introduction of ETCs� Creation of ETCs to replicate the characteristics of an exchange

traded UCITS fund

□ Open ended, cost efficient , transparent and bankruptcy remote


□ Trustee structure and English-law security charges provide significant protections against issuer and counterparty risk

□ ETCs are eligible for investment by UCITS funds as transferable securities that do not embed a derivative

The Macro Context

� Even following Greece’s orderly debt restructuring earlier this year, its debt remains above 120% of GDP, a levelconsidered unsustainable by most analysts. With pro-reform parties knocked out of power in Greece’s earlyMay elections, there are growing concerns that Greece may opt for a disorderly default and leave the Euro.Fears of possible highly disruptive contagion are keeping investors on the sidelines.

� Spain and Italy – Spain in particular – have also been dragged back towards crisis, with government bondspreads widening sharply as fiscal and growth concerns have returned.

Greek concerns spur flight to safety

spreads widening sharply as fiscal and growth concerns have returned.� Therefore, while the initial Greek debt restructuring and large liquidity interventions by the ECB staved off a

broad European sovereign crisis earlier this year, the root structural problems are far from being resolved. Thiswill likely keep markets on edge and keep central banks in easing mode for the foreseeable future.

2.0

2.5

3.0

3.5

4.0

Investors Flee to Safety(10-yr US Treasury and German Bund yields)%

300

400

500

600

Spanish and Italian Bond Spreads Surge

Spain Italy

10-yr spreads to German Bunds (Bps), From May 19, 2010 to May 18, 2012


0.0

0.5

1.0

1.5

2.0US

Germany

Source: Bloomberg, ETF Securities 0

100

200

300

Ap

r-1

0

Ma

y-1

0

Jun

-10

Jul-

10

Au

g-1

0

Se

p-1

0

Oct

-10

No

v-1

0

De

c-1

0

Jan

-11

Fe

b-1

1

Ma

r-1

1

Ap

r-1

1

Ma

y-1

1

Jun

-11

Jul-

11

Au

g-1

1

Se

p-1

1

Oct

-11

No

v-1

1

De

c-1

1

Jan

-12

Fe

b-1

2

Ma

r-1

2

Ap

r-1

2

Ma

y-1

2

Source: Bloomberg, ETF Securities

� US jobs, housing and manufacturing data have been improving, supporting the household sector.Despite a weak payrolls report for May, over 2 million jobs have been added to US economy overthe past 15 months. The manufacturing ISM has been on a rising trend since November 2011,helping drive a global industrial recovery.

� The Eurozone, however, has been showing distinct signs of economic weakness, with most

Mixed global growth prospects

� The Eurozone, however, has been showing distinct signs of economic weakness, with mostcountries in recession and only Germany currently managing to hold growth above zero.

� China’s economy has slowed, but with GDP growth of 8.1% in 1Q 2012, it is still strong. China’sauthorities are now reacting strongly, cutting bank reserve requirements, easing credit controls andannouncing new fiscal stimulus. While the growth moderation may continue in the near-term, thesubstantial fiscal and monetary resources available should help support continued healthy growth.

4

7

10

15

20

25More Stimulus to Come

China Reserve Ratio Requirement

Chinese CPI

% %

50

55

60

65

Manufacturing PMI: Europe, China and USIndex level, Monthly Data, From May 31, 2007 to May 31, 2012


-5

-2

1

4

0

5

10

15


25

30

35

40

45

50

May

07

No

v 0

7

May

08

No

v 0

8

May

09

No

v 0

9

May

10

No

v 1

0

May

11

No

v 1

1

May

12

EU PMI US PMI China PMI

Source: ETF Securities, Bloomberg

� Low interest rates and more liquidity to offset fiscal retrenchment and support weak financial sectorsare likely to remain key features of the global central bank policy in 2012.� The US Federal Reserve committed to loose monetary policy until late 2014. Potential for QE3.

� Bank of England pumped another £50bn into the UK economy at the beginning of February, with the Bank ofJapan also adding ¥10tn (approx. US$125bn) to its asset purchase scheme during the same period.

Accommodative monetary policy here to stay

Japan also adding ¥10tn (approx. US$125bn) to its asset purchase scheme during the same period.

� The ECB balance sheet is expanding rapidly: the second round of Long-Term Refinancing Operation (LTRO) atthe end of February 2012 added €530bn to bank balance sheets after pumping in €489bn in December 2011.Banks have the liquidity for 3 years.

� China has reduced bank reserve requirements three times in past six months to support the real economy andmore recently has started to relax credit controls.

1250

1750

2250-10

-6

-2

Real interest rate (inverted)*

Gold spot price (RHS axis)

% p.a.

Gold price vs. US real interest rate Daily data, 03/23/1977 - 03/23/2012 USD/oz

2,000

2,500

3,000

US Base Money *

Monthly, in US$bn, April 30, 1960 - April 30, 2012


-250

250

7502

6

10

Mar 77 Mar 82 Mar 87 Mar 92 Mar 97 Mar 02 Mar 07 Mar 12


* 2 year US governement bond rates ajusted for current month inflation rate (per annum).

0

500

1,000

1,500

19

60

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12


* Currency in circulation and commercial banks reserves with the US Federal Reserve. From first available data.

� Despite near-term volatility, long-term structural factors remain supportive of commodityprices.

� The continued industrialisation and increasing incomes of large population developingeconomies such as China and India are supporting long-term commodity demand. Supplyremains constrained and increasingly difficult to access, pushing commodity prices higher.

Long-term structural factors remain commodity supportive

remains constrained and increasingly difficult to access, pushing commodity prices higher.� More recently, high and rising developed economy debt levels and unprecedented

monetary expansion have increased demand for “hard assets” as a hedge against inflationand potential currency debasement.

6,000

9,000

Rising per Capita Incomes Drive Commodity Demand

Australia

USA

Japan

RussiaGermanyFrance

(Kg

of

oil

eq

uiv

ale

nt

pe

r ca

pit

a)

25,000

30,000

35,000

40,000

45,000

Gro

ss N

atio

nal I

ncom

e (p

er c

apita

)

Asian Development Rates

Japan (t=0, 1962)

Korea (t=0, 1974)

China (t=0, 1995)

India (t=0, 2002)

$US


0

3,000

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

BrazilChina

Egypt

UK

Japan

Italy

Mexico

Malaysia

France

India

Sources: World Bank, ETF Securities

Data: As of 2008.

En

erg

y U

se(K

g o

f o

il e

qu

iva

len

t p

er

cap

ita

)

GDP per capita (current US$)

-

5,000

10,000

15,000

20,000

25,000

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48

Gro

ss N

atio

nal I

ncom

e (p

er c

apita

)

Time (years)

Malaysia (t=0, 1973)

Source: World Bank, ETF Securities

Data: Annual

ChinaIndia

� US economic recovery has continued but most of Europe remains inrecession.

� The still substantial macro and political risks are keeping investors cautiousand aiding demand for risk hedges. ‘Barbell’ strategies are thus preferred.

Strategies for 2012 – barbell approaches in favour

� An uncertain economic outlook, coupled with the flood of central bankstimulus has historically been supportive of defensive assets such as preciousmetals - gold in particular - high dividend yield stocks and areas whereinvestors feel there is more certainty.

� Supply shocks in commodity markets are constraining supplies and in turnproviding price support:□ Middle-East upheaval has added a supply risk premium to oil prices that has reduced recently but is unlikely to

disappear.□ Social unrest in South Africa has lifted platinum and palladium prices as supplies have been reduced.□ Copper faced with supply disruptions last year and this year on labour strikes and weather problems in Chile.


□ Copper faced with supply disruptions last year and this year on labour strikes and weather problems in Chile.

� Strong income stream and defensive equities:□ Gold mining companies provide investors with an indirect exposure to the gold price.□ Companies with a history of providing stable dividends can give investors exposure to stable income streams.

Scenario Analysis: What performs when growth is fal ling ?

Long gold, precious metals and sugar ETCs have outperformed when growth is falling

1%

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Growth is calculated as the simple average of US ISM and EU PMI growth on a 3 month moving average basis. The chart above looks at the performance of

the above indexes during the worst 20% months of growth performance over the past 5 years.

Long IVSTOXX, gold miners and agribusiness have outperformed when growth is falling

4%

6%

8%

10%

-4%

-2%

0%

2%

4%

ET

FX-B

ofA

ML

IVS

TO

XX

ET

F

ET

FX D

AX

glo

ba

l G

old

Min

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Fu

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t IT

G G

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the above indexes during the worst 20% months of growth performance over the past 5 years.

What’s driving the gold price and 2012/13 outlook

� Historically, gold has tended to perform best during periods of low real interest rates and during periodsof high monetary expansion.

� Most major reserve currency central banks have put in place quantitative and other forms of highlyexpansionary monetary policy in order to support banks, financial markets and growth. Given continuedlarge debt burdens and weak financial systems, these policies are likely to remain in place for sometime.

The world has changed: reserve currencies are being debased

large debt burdens and weak financial systems, these policies are likely to remain in place for sometime.

� The large increases in money supply have raised currency debasement fears and have kept investordemand for gold as an alternative store of value.

1,500,000

2,000,000

2,500,000

Federal Reserve Balance SheetWeekly, From Apr 20, 1999 to Mar 20, 2012

US$ millions

1,750,000

2,250,000

2,750,000

3,250,000

ECB Balance SheetWeekly, From Apr 20, 1999 to Mar 20, 2012

€millions


0

500,000

1,000,000

Ap

r-1

99

9

Oct

-19

99

Ap

r-2

00

0

Oct

-20

00

Ap

r-2

00

1

Oct

-20

01

Ap

r-2

00

2

Oct

-20

02

Ap

r-2

00

3

Oct

-20

03

Ap

r-2

00

4

Oct

-20

04

Ap

r-2

00

5

Oct

-20

05

Ap

r-2

00

6

Oct

-20

06

Ap

r-2

00

7

Oct

-20

07

Ap

r-2

00

8

Oct

-20

08

Ap

r-2

00

9

Oct

-20

09

Ap

r-2

01

0

Oct

-20

10

Ap

r-2

01

1

Oct

-20

11

Ap

r-2

01

2

Source: Bloomberg, ETF Securities-250,000

250,000

750,000

1,250,000

Ap

r-1

99

9

Oct

-19

99

Ap

r-2

00

0

Oct

-20

00

Ap

r-2

00

1

Oct

-20

01

Ap

r-2

00

2

Oct

-20

02

Ap

r-2

00

3

Oct

-20

03

Ap

r-2

00

4

Oct

-20

04

Ap

r-2

00

5

Oct

-20

05

Ap

r-2

00

6

Oct

-20

06

Ap

r-2

00

7

Oct

-20

07

Ap

r-2

00

8

Oct

-20

08

Ap

r-2

00

9

Oct

-20

09

Ap

r-2

01

0

Oct

-20

10

Ap

r-2

01

1

Oct

-20

11

Ap

r-2

01

2

Source: ECB, ETF Securities

� Private investors are not the only ones buying gold. The official sector (mostly central banks) have also been increasing holdings, with monetary authorities accounting for 10% of global gold demand in 2011 according to the World Gold Council (May 2012). These investors were a net annual supplier of 12% into the market between 2001 and 2009, indicating a net switch of over 20 percentage points in gold’s global supply/demand balance.

� Rising official net purchases have been spearheaded by surplus emerging market countries. These countries

Central banks have switched from net sellers to large net buyers of gold

� Rising official net purchases have been spearheaded by surplus emerging market countries. These countries have been looking to diversify their foreign exchange holdings on rising sovereign debt concerns across much of the developed world.

� Latest IMF data shows that central banks remained strong net gold buyers through the first 4 months of 2012.

5%

10%

15%

20%

Official Gold Sales (% Total Global Supply)Annual, Past 10 Years , 2001 - 2011


-10%

-5%

0%

5%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: ETF Securities, GFMS Thomson Reuters, World Gold Council

� China is a growing force driving global gold demand. At the end of Q4 2011 China accounted for 25% of total world gold demand, up from only 9% 10 years ago. Jewelry, investment and manufacturing are all seeing large increases in demand.

� In the same way that the combination of China’s rising per capita income and its large population is driving a structural increase in demand for a wide range of commodities and other goods, gold is also seeing a structural upward shift in demand as China and other emerging market economies continue to develop.

China a growing force driving physical demand for gold

structural upward shift in demand as China and other emerging market economies continue to develop.� Over the past year China’s imports of gold through Hong Kong have soared. While these numbers may be

affected by factors other than pure new demand (for example, use as trade collateral), they are generally regarded as one of the better windows onto what is otherwise quite an opaque market. Jan-Apr gold imports through HK are already more than half last year’s full year numbers, indicating continued robust China gold demand this year.

150

200

2502011 (Q4)

2001 (Q4)

Global Gold Consumption by Country Tonnes (LHS axis) and % of Global Demand (Labels)

21%

25%

15%

Tonnes

21%

15%

20%

25%

250

300

350

400

450

500China imports (tonnes, LHS axis) % global demand

% demand

China Gold Imports from Hong KongAnnual (2012 excluded), 2001-2012


0

50

100

150

India China* Germany Turkey USA

9%

5%

1%

3%4%

15%

7%

Source: World Gold Council, ETF Securities. Countries listed are the top 5 global gold consumers as at end Q4 2011. Consumption defined as

investment and jewellery demand.

* Greater China including Taiwan, Hong Kong

0%

5%

10%

0

50

100

150

200

250

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Jan

- A

pr

20

12

*

Source: Thomson Reuters GFMS, World Gold Council, Hong Kong Census and Statistics Department, ETF Securities

Note: Global gold demand is as of Q1 2012, as latest available.

� China’s central bank gold holdings stand at around only 1.7% of total reserves. This compares to a world average of 12% and 76% for the US. Most large developed countries hold more than 60% of their reserves in gold and this level has been increasing recently.

� Given that China’s total reserves now stand at US$3.3tn, an increase in its gold reserve holdings just to the world’s average of around 11% would equate to over US$350bn of gold purchases at today’s prices or 194mn ounces, around 1.5 times the world’s total annual gold output. An increase to US levels would

Emerging market gold reserve holdings still low

or 194mn ounces, around 1.5 times the world’s total annual gold output. An increase to US levels would be equivalent to around 10 years of current annual gold output.

40

50

60

70

80

90China France Germany India United States

Central Bank Gold Holdings as % of Total Reserves% Total Reserves, Quarterly data, From Q3 2001 to Q3 2011


0

10

20

30

Q3

20

01

Q1

20

02

Q3

20

02

Q1

20

03

Q3

20

03

Q1

20

04

Q3

20

04

Q1

20

05

Q3

20

05

Q1

20

06

Q3

20

06

Q1

20

07

Q3

20

07

Q1

20

08

Q3

20

08

Q1

20

09

Q3

20

09

Q1

20

10

Q3

20

10

Q1

20

11

Q3

20

11

Source: World, Gold Council, ETF Securities

� Gold accounts for just 1% of global financial portfolios according to World Gold Council estimates.� Low weighting despite the fact that gold market liquidity is extremely high with around US$250bn traded

daily based on London Bullion Market Association estimates1.� On these numbers, if gold holdings were to increase to just 2% of global financial portfolios, it would be

equal to nearly 6 years of 2011 annual gold supply.

Gold still a small part of global portfolio assets

equal to nearly 6 years of 2011 annual gold supply.

Bonds

49%

Money

Markets

9%

Alternatives

4%

Gold

1%

Global Portfolio Allocations Across Financial Markets


Equities

37%

Figures estimated as at December 2010, World Gold Council study

1LBMA Gold Turnover Survey for Q1 2011. http://www.lbma.org.uk/assets/Loco_London_Liquidity_Surveyrv.pdf

� The rise of the gold price in recent years has been relatively steady, even taking recent price volatility into account. The pace of price gains so far is still just a fraction of those seen in previous asset “bubble” episodes such as the gold price rise in the 1972-1982 period and the NASDAQ dot.com bubble of 1995-2005.

� So far the gold price has not experienced the typical exponential rise seen in the run-up to the collapse of previous asset price bubbles.

Is gold in a “bubble?”

1,200

1,600

2,000

2,400

2,800

3,200Gold Price (31/08/1968 - 31/08/1985) Gold Price (24/05/2002 - 24/05/2012)

NASDAQ Index (31/08/1988 - 31/08/2005)

Is Gold in a Bubble?Index level, Daily data rebased to 100


0

400

800

0 1 2 3 4 5 6 7 8 9 10 12 13 14 15 16


Number of Years

� Most investors in gold ETPs have medium-to-long term time horizons, buying for portfolio diversification and as a hedge for inflation, risk and currency debasement. In August and September 2011 when prices corrected sharply, gold ETP holdings held firm and rose further in October. During the most recent gold price correction gold ETP holdings have also held relatively firm.

� Most of the short-term speculative investment takes place in the gold futures market as reflected in sharp swings in futures positioning during both upward and downward price corrections. After building up large net

Gold investor positioning

swings in futures positioning during both upward and downward price corrections. After building up large net longs in Jan and Feb 2012, net speculative longs have now dropped back to end 2008 lows, indicating that much of the speculative froth in the market has been cleared.

50

60

70

80

90

Gold Global ETP Holdings (mn oz)Daily Data, From 25 Apr 07 to 25 May 2012

250

300

300

350

400

450

500Trading Volume (LHS)

Net Non-Commercial Positions

COMEX GoldDaily Data, From Jun 01, 2011 to Jun 01, 2012'000 contracts '000 contracts


0

10

20

30

40

50

Apr 07 Apr 08 Apr 09 Apr 10 Apr 11 Apr 12Sources: ETF Securities, Bloomberg

100

150

200

0

50

100

150

200

250

300

Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12Sources: ETF Securities, Bloomberg

Using a physical precious metals basket as a portfolio diversifier

� A basket of all four precious metals: Gold, Silver, Platinum and Palladium.

� Methodology: fixed quantity of metal with implied US dollar weights changing based on relative performance over time.

� Tracks spot prices less the annual management fee (0.44% per annum as at 31 May 2012).

ETFS Physical PM Basket (PHPM)

� Tracks spot prices less the annual management fee (0.44% per annum as at 31 May 2012).

Metal 24/04/2007* 31/05/2012

Palladium 11.7% 10.0%

Platinum 20.3% 11.5%

Silver 25.8% 27.5%

Gold 42.2% 51.1%

ETFS Physical PM Basket – Metal Weights


Gold 42.2% 51.1%

Source: ETF Securities. * Listing date.

Precious metals vs broad commodity indexes

• Precious metals as a group have outperformed most major asset classes, including most broad commodity benchmarks over the past ten years.

• They have also tended to have a lower correlation with most global equity benchmarks. • Volatility has been modestly higher than broad commodities and similar or lower than most

equity benchmarks.

Asset Class Returns (EUR returns to 22 May 2012)

equity benchmarks.

Cumulative Returns (EUR) Correlations with

YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs FTSE 100Eurostoxx

50S&P 500 DAX30

Physical PM Basket 5% 7% 83% 104% 163% 0.09 0.00 0.04 0.02 18.7% 0.489

DJ-UBS Commodity 3 Month Forward Index -3% -7% 31% 7% 121% 0.38 0.29 0.32 0.28 16% 0.44

EuroStoxx 50 Index -3% -19% 0% -42% -15% 0.86 1.00 0.52 0.94 26% -0.10

S&P 500 Index 7% 13% 74% 2% 8% 0.50 0.52 1.00 0.56 23% -0.01

MSCI AC World Index 4% 2% 49% -10% 14% 0.76 0.76 0.89 0.76 18% 0.02

Hedge Fund Multi Strategy Index 7% 14% 38% 20% 34% -0.05 -0.01 -0.01 0.00 10% 0.19

EUR/USD Currency -2% -9% -9% -5% 38% 0.00 0.13 -0.32 0.09 10% 0.21

VolatilitySharpe Ratio


Physical PM Basket includes gold, silver, platinum and palladium. Weights as of 31/5/12 were gold-51%, silver-28%, Palladium 11%, platinum 10%.Source: ETF Securities, Bloomberg

EUR/USD Currency -2% -9% -9% -5% 38% 0.00 0.13 -0.32 0.09 10% 0.21All returns, correlations and volatilities are based on actual index data or underlying commodity prices excluding fees. Returns are in EUR, dates are from the 22nd May 2002 to the 22nd May 2012, unless otherwise stated. Sharpe ratios are based on 10 year returns, 10 year volatility and a risk free rate of 1.04% (average of US 5Yr rates over 1

� Precious metals have historically outperformed when equity markets perform poorly.

Historical event hedge properties

2%

Return during EuroStoxx Worst 20% (EUR)Source: Bloomberg, Monthly Data in EUR, From Mar 02 to Apr 12

1.8% 1.2% 0.6%-1.1%

-6.1% -6.3%-7.1%

-10%

-8%

-6%

-4%

-2%

0%

2%G

old

Spo

t

Pre

ciou

s M

etal

s

DA

Xgl

obal

Gol

d M

iner

s

CS

Hed

ge F

und

Mul

ti

S&

P 5

00

MS

CI W

orld

Eur

oSto

xx 5

0


Note: Based on weakest 20% of trading months of the EuroStoxx 50 over the period.

Gol

d S

pot

Pre

ciou

s M

etal

s

DA

Xgl

obal

Gol

d M

iner

s

CS

Hed

ge F

und

Mul

ti S

trat

egy S&

P 5

00

MS

CI W

orld

Eur

oSto

xx 5

0

� The portion of platinum demand coming fromEurope, North America and Japan has decreasedsubstantially in the past five years.

� At global aggregate level, emerging markets have

Platinum: supply and demand drivers

� Mine production represents over 80% of totalplatinum supply (as of 2011).

� The biggest platinum producer is South Africa, with60% of global supply, followed by Russia and North

SUPPLY DEMAND

� At global aggregate level, emerging markets havebeen playing a more prominent role1.

� The two largest sources of demand for platinumare Chinese jewellery sales and Europeanautocatalysts (primarily for diesel vehicles)1.

2,000

2,500

3,000

3,500 Other Petroleum Medical & BiomedicalJewellery Investment GlassElectrical Chemical Autocatalyst

Evolution of Gross Platinum Demand by Region and ApplicationThoudands oz, Yearly, 2007 vs 2011

34%

26%

29%

6,000

7,000

8,000

9,000

10,000Old Jewellery Scrap Autocatalyst Scrap Total Mine Production

World Platinum SupplyThousands oz, Yearly, From 2002 to 2011

60% of global supply, followed by Russia and NorthAmerica.

� Scrap supply is becoming a more prominentsource of platinum and now accounts for almost20% of global platinum supply.


-500

0

500

1,000

1,500

2007 2011 2007 2011 2007 2011 2007 2011 2007 2011RoWChinaNorth AmericaJapan

Source: Johnson Matthey, ETF Securities

Europe

16%

13%

19%

14%

18%

15%16%

The percentages show the portion of total platinum demand that is attributable to each region.

1 Johnson Matthey

0

1,000

2,000

3,000

4,000

5,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: GFMS, ETF Securities

� US and China were the largest drivers ofautocatalyst demand for palladium, followed byEurope. Most demand is from gasoline vehicles2.

� Despite slowing global growth, palladium

Palladium: supply and demand drivers

SUPPLY DEMAND

� Mine production represents over 80% of totalpalladium supply (as of 2011).

� The biggest palladium producer is Russia, whichaccounts for 32% of total palladium supply. South � Despite slowing global growth, palladium

consumption has risen across most regions since2007. Japan and North America were exceptions.

� Palladium autocatalyst demand rose 5% in 2011 toan 11-year high, strengthening palladiumdominance in the gasoline market and alsopenetrating the diesel market.

2,000

2,500

3,000 Petroleum Medical & Biomedical JewelleryInvestment Glass ElectricalChemical Autocatalyst

Evolution of Gross Palladium Demand by Region and ApplicationThoudands oz, Yearly, 2007 vs 2011

20%22%

20%

27%

23%

20%6,000

7,000

8,000

9,000

10,000Old Jewellery Scrap Autocatalyst Scrap Total Mine Production

World Palladium SupplyThousands oz, Yearly, From 2002 to 2011

accounts for 32% of total palladium supply. SouthAfrica is the 2nd biggest producer with 31% of totalsupply.

� Scrap supply represents the 3rd largest source ofpalladium supply, accounting for 20% of globalsupply in 2011.


-500

0

500

1,000

1,500

2007 2011 2007 2011 2007 2011 2007 2011 2007 2011

RoWChinaNorth AmericaJapan

Source: Johnson Matthey, ETF Securities

Europe

16%17%

15%

19%20%

The percentages show the portion of total palladium demand that is attributable to each region.

2 Johnson Matthey

0

1,000

2,000

3,000

4,000

5,000

6,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: GFMS, ETF Securities

� China accounted for 26% ofplatinum demand and 22% ofpalladium demand in 2011.

China auto market now larger than US and European markets

Auto Sales* in US, Eurozone** and ChinaUnits, Monthly, From April 30, 2005 to April 30, 2012

� Chinese palladium consumption ismostly driven by gasolineautocatalysts, in contrast toplatinum demand which the isdominated by jewelry production.

� China’s auto sales have almostquadrupled in the past 6 years,overtaking Europe in 2008 and theUS in 2009.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000US China Europe

Units, Monthly, From April 30, 2005 to April 30, 2012


0

2005 2006 2007 2008 2009 2010 2011 2012Source: Bloomberg, ETF Securities

* Cars and light trucks sales

** Total EU27 + EFTA

� Both platinum and palladium are heavily usedin industrial production, resembling industrialmetals in terms of their short-term pricedrivers and gearing into the economic cycle.

� Concerns about the Eurozone crisis and

Platinum and palladium prices linked to the global industrial cycle and China demand

100%

150%

200%Platinum US ISM Manufacturing (RHS) Series3

Platinum and Palladium Prices vs. US ISM Manufacturing IndexAnnual %, Monthly, 30 April 1996 - 30 April 2012

� Concerns about the Eurozone crisis andslowing Chinese activity have draggedpalladium prices lower this year despiteimprovements in the global auto market.

� Although emerging market demand will be akey driver of palladium prices in the medium-term, short-term price moves are often drivenby risk sentiment.

� Recent signals of monetary easing and fiscalstimulus by China's policy-makers are likely toadd fundamental support to demand andprices.

� In particular, this week the Chinesegovernment said it will resume its subsidy

-100%

-50%

0%

50%

Apr 96 Apr 98 Apr 00 Apr 02 Apr 04 Apr 06 Apr 08 Apr 10 Apr 12


60

80

100

120

1,560,000

1,820,000

2,080,000Units (LHS, units) % Change (RHS, 3m moving average of YoY % change)

The Impact of China Auto Subsidies on Auto Sales* Units, Monthly, From April 30, 2005 to April 30, 2012


government said it will resume its subsidyprogram aimed at encouraging rural residentsto trade in their old vehicles for new, fuelefficient models.

� In 2009, China launched a similar program,providing tax incentives and subsidies to ruraldwellers. This move helped bolster the automarket and was a key factor in pushing Chinato surpass the US in terms of vehicle sales.-80

-60

-40

-20

-

20

40

60

0

260,000

520,000

780,000

1,040,000

1,300,000

2006 2007 2008 2009 2010 2011 2012


* Cars and light trucks sales

Mar 2009 to Dec 2009: China's

state council introduces auto

subsidies to rural residents

May 2012: China's

government announced

they will soon resume the

auto subsidy to farmers

Copper: the canary in the coal mine?

Global industrial cycle a key driver of industrial metals prices

� Strong correlation between US growth in manufacturing and industrial metals price growth on anannual basis, reflecting the importance of raw materials in the production process. While China isthe largest consumer of copper, the stabilisation of the US economy, supported by risingmanufacturing activity and jobs is likely to assist demand for copper.

� Four out of the last seven cycle lows for industrial metals prices have occurred around current� Four out of the last seven cycle lows for industrial metals prices have occurred around currentgrowth levels, with only the financial crisis reaching lower levels. The average timeframe from theweakest growth to the highest for industrial metals prices has been 13 months since 1992.

Annual %

60%

80%

100%

120%

140%

Industrial Metals*

US ISM Manufacturing (RHS)

Industrial Metals vs. US ManufacturingMonthly, 31 March 1992 - 30 April 2012


Monthly, 06/30/2005 – 06/30/2011

-80%

-60%

-40%

-20%

0%

20%

40%

Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10

Source: Bloomberg* DJ-UBS Industrial Metals Total Return Sub-IndexSM

Copper deficit expected in 2012

� Demand is expected to outstrip supply in 2012 leading the International Copper Study Group(ICSG) to expect that the global copper market will fall into deficit this year (March 20, 2012 ICSGanalysis).

� Lowest LME inventory levels since November 2008 have led to a rise in copper prices in recentmonths.months.

� BREE forecasts copper prices to average US$8430 in 2012, on the back of lower investmentdemand compared to 2011. Copper prices are then forecast to strengthen by around 5% toUS$8830 per tonne in 2013, reflecting the increasing tightness of the physical market.

500

1,000

1,500

500

1,000

1,500

Copper Supply, Demand and Balance

'000 tonnes '000 tonnesSource: BREE, Annual Data, From 2000 to 2012

f'cast

8

10

12

800

1,000

1,200

US

$1

,00

0/ M

etric to

ns

LME

Inv

en

tory

(1

,00

0 M

etr

ic t

on

s)

Copper Inventory and Price

LME Copper Stocks (metric tonnes)

SHFE Copper Deliverable stocks (metric tonnes)

LME Copper Spot (RHS)

Monthly Data, From 31/12/1989 to 30/04/2012


-1,000

-500

0

500

-1,000

-500

0

500

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Balance (RHS)

Supply (YoY Chge, LHS)

Demand (YoY Chge, LHS) 0

2

4

6

0

200

400

600

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

US

$1

,00

0/ M

etric to

ns

LME

Inv

en

tory

(1

,00

0 M

etr

ic t

on

s)


Source: Bureau of Resources and Energy Economics (BREE)

Copper conundrum?

� Attractive Shanghai-London copper futures premium in late 2011 appear to have been the driverof an import spike.

� Chinese imports have been the source of rising copper inventories in China in recent months.Chinese copper inventory levels are the highest since 2002.

� The jump in stock levels have historically unwound over the ensuing 3-6 months, as is occurringcurrently.

150

200

250

300

400

500

Th

ou

san

ds

Chinese Re-stocking Drives Imports

China Copper Imports (lhs)

SHFE Copper Deliverable stocks (rhs)

'000

tonnes'000

tonnes

'000

tonnes'000

tonnes

250

750

1250

300

400

500

Imports Boosted by Chinese Premium

SHFE - LME copper price (4mth lag) (rhs)

China Copper Imports (lhs)

USD/t'000

tonnes

0


0

50

100

0

100

200

Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012

Source: Bloomberg, ETF SecuritiesSource: Bloomberg, ETF Securities

-1250

-750

-250

0

100

200

Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012


0

Performance tables by asset class and sector

Equity

Apr 12 YTD 1 Yr 3 Yrs 5 YrsFTSE 100

Eurostoxx 50

S&P 500 DAX30

2x Leveraged Equity ETFs

ETFX FTSE® 100 Leveraged (2x) Fund* -13% -7% -22% 36% n.a. 1.00 0.89 0.70 0.88 40%

ETFX ProductsCumulative Returns (Base Currency)

VolatilityCorrelations with

ETFX FTSE® 100 Leveraged (2x) Fund* -13% -7% -22% 36% n.a. 1.00 0.89 0.70 0.88 40%ETFX DAX® 2x Long Fund -9% 17% -29% 43% -55% 0.83 0.94 0.63 1.00 52%ETFX FTSE® MIB Leveraged (2x) Fund* -10% -20% -61% n.a. n.a. 0.83 0.95 0.68 0.88 57%

2x Short Equity ETFs

ETFX FTSE® 100 Super Short Strategy (2x) Fund* 12% 0% -3% n.a. n.a. -1.00 -0.90 -0.70 -0.89 37%ETFX DAX® 2x Short Fund* 9% -20% -1% -63% n.a. -0.88 -0.95 -0.72 -1.00 48%

ETFX FTSE® MIB Super Short Strategy (2x) Fund* 7% 10% 53% n.a. n.a. -0.83 -0.95 -0.68 -0.88 56%US Equity ETFs

ETFX Russell 2000 US Small Cap Fund -5% 3% -7% 64% -5% 0.48 0.54 0.92 0.56 27%Thematic Equity ETFsETFX WNA Global Nuclear Energy Fund -10% -4% -23% -4% -38% 0.63 0.64 0.69 0.63 20%ETFX S-Net ITG Global Agri Business Fund -8% 2% -12% 25% 36% 0.57 0.56 0.73 0.57 26%ETFX DAXglobal Alternative Energy Fund -5% -11% -32% -40% -52% 0.68 0.68 0.60 0.65 25%ETFX DAXglobal Coal Mining Fund -16% -17% -41% 29% -5% 0.48 0.48 0.62 0.48 41%ETFX DAXglobal Gold Mining Fund -9% -18% -26% 1% 21% 0.27 0.22 0.24 0.20 36%



All returns, correlations and volatilities are based on actual index data or underlying commodity prices excluding fees. Returns are in USD, dates are from the 22nd

May 2002 (10 Yrs), 2007 (5 Yrs),

2009 (3 Yrs), 22nd

May 2011 (1 Yr), 31st

December 2011 (YTD) and from 22nd

April to 22nd

May 2012 (May 12).

* Correlations and volatility are calculated since inception.

-9% -18% -26% 1% 21% 0.27 0.22 0.24 0.20 36%ETFX DAXglobal Shipping Fund -14% 2% -30% -19% -64% 0.46 0.46 0.42 0.44 29%ETFX DJ-UBS All Commodities 3 Month Forward Fund -3% -5% -16% 19% 1% 0.39 0.35 0.29 0.32 17%ETFX AEX® Fund -3% -3% -12% 26% -33% 0.90 0.95 0.57 0.87 26%ETFX AMX® Fund -5% 7% -21% 44% -22% 0.78 0.78 0.52 0.73 22%ETFX Dow Jones Global Select Dividend Fund -5% 1% -9% 57% -13% 0.76 0.76 0.61 0.71 19%

ETFX-BofAML IVSTOXX ETF* 10% -22% 24% -62% 30% -0.42 -0.49 -0.27 -0.46 55%

Precious metals

May 12 YTD 1 Yr 3 Yrs 5 Yrs 10 YrsFTSE 100

Eurostoxx 50

S&P 500 DAX30

Cumulative Returns (USD) Correlations with

VolatilitySharpe Ratio



May 2002 (10 Yrs), 2007 (5 Yrs),

Precious Metals

ETFS Precious Metals DJ-UBSCISM* -4% 0% -3% 70% 128% 391% 0.26 0.23 0.03 0.23 23% 0.72

ETFS Physical Platinum -6% 8% -17% 27% 13% 170% 0.24 0.22 0.09 0.22 24% 0.39

ETFS Physical Palladium -8% -3% -15% 162% 63% 71% 0.28 0.25 0.12 0.23 37% 0.12

ETFS Physical Silver -10% 0% -19% 91% 115% 482% 0.15 0.13 0.00 0.14 38% 0.48

ETFS Physical Gold -3% 3% 5% 65% 139% 399% 0.15 0.11 -0.03 0.11 20% 0.84

ETFS Physical PM Basket -4% 3% -3% 66% 93% 262% 0.23 0.19 0.03 0.19 20% 0.64

ETFS Gold* -3% 0% 3% 61% 127% 356% 0.20 0.17 -0.02 0.17 20% 0.78

ETFS Silver* -8% 1% -20% 87% 105% 435% 0.34 0.31 0.10 0.30 36% 0.49

ETFS Platinum* -6% 4% -18% 21% 9% 229% 0.32 0.30 0.15 0.29 25% 0.47



May 2002 (10 Yrs), 2007 (5 Yrs),

2009 (3 Yrs), 22nd

May 2011 (1 Yr), 31st


April to 22nd

May 2012 (May 12). Correlations and volatilities are correlation and annual volatility of daily returns over

period from 22nd

May 2002 to 22nd

May 2012, unless otherwise stated. Sharpe ratios are based on 10 year returns, 10 year volatility and a risk free rate of 1.04% (average of US 5Yr rates over 1

year).

* These products track indices priced off futures returns.

Industrial metals


Eurostoxx 50

S&P 500 DAX30

Industrial Metals

Cumulative Returns (USD) Correlations withVolatility

Sharpe Ratio


ETFS Industrial Metals DJ-UBSCISM* -3% -1% -18% 34% -36% 197% 0.50 0.49 0.29 0.47 27% 0.39

ETFS Forward Industrial Metals DJ-UBSCI-F3SM* -3% -1% -18% 37% -29% 297% 0.50 0.49 0.30 0.47 26% 0.53

ETFS Aluminium* -2% -2% -22% 20% -47% 21% 0.41 0.41 0.24 0.40 24% 0.04

ETFS Copper* -4% 1% -14% 55% 0% 469% 0.50 0.48 0.29 0.46 32% 0.55

ETFS Zinc* -4% 3% -13% 11% -56% 99% 0.41 0.39 0.22 0.37 35% 0.17

ETFS Nickel* -4% -10% -25% 28% -67% 252% 0.36 0.34 0.21 0.33 41% 0.30

ETFS Tin* -7% 2% -27% 48% 54% 554% 0.36 0.34 0.22 0.33 32% 0.62

ETFS Lead* -5% -4% -21% 27% -11% 499% 0.42 0.39 0.24 0.38 38% 0.49




May 2002 (10 Yrs), 2007 (5 Yrs),

2009 (3 Yrs), 22nd

May 2011 (1 Yr), 31st


April to 22nd


period from 22nd

May 2002 to 22nd


year).


Agriculture


Eurostoxx 50

S&P 500 DAX30

Agriculture

ETFS Agriculture DJ-UBSCISM* -4% -3% -17% 19% 29% 65% 0.35 0.32 0.23 0.30 21% 0.19


Sharpe Ratio

ETFS Forward Agriculture DJ-UBSCI-F3SM* -4% -7% -18% 25% 48% 156% 0.36 0.33 0.23 0.31 20% 0.44

ETFS Grains DJ-UBSCISM* 0% 3% -14% 6% 20% 51% 0.29 0.26 0.18 0.25 25% 0.12

ETFS Forward Grains DJ-UBSCI-F3SM* -1% -2% -16% 7% 33% 129% 0.30 0.27 0.19 0.26 24% 0.31

ETFS Wheat* 8% 3% -27% -37% -34% -40% 0.22 0.20 0.15 0.19 34% -0.18

ETFS Corn* -3% -7% -20% 10% -3% -21% 0.24 0.22 0.15 0.21 30% -0.11

ETFS Soybeans* -4% 13% -1% 32% 81% 264% 0.28 0.25 0.17 0.24 27% 0.48

ETFS Softs DJ-UBSCISM* -9% -16% -25% 40% 38% 33% 0.32 0.30 0.21 0.28 22% 0.08

ETFS Forward Softs DJ-UBSCI-F3SM* -9% -18% -25% 66% 76% 132% 0.34 0.31 0.22 0.30 20% 0.38

ETFS Sugar* -8% -9% 7% 48% 74% 107% 0.20 0.18 0.11 0.16 35% 0.19

ETFS Cotton* -19% -18% -45% 47% 10% -31% 0.24 0.23 0.17 0.22 30% -0.16

ETFS Coffee* -2% -25% -38% 6% 4% 3% 0.24 0.23 0.17 0.22 31% -0.02

ETFS Soybean Oil* -9% -5% -16% 10% 7% 115% 0.33 0.29 0.22 0.28 26% 0.26




May 2002 (10 Yrs), 2007 (5

Yrs), 2009 (3 Yrs), 22nd

May 2011 (1 Yr), 31st


April to 22nd

May 2012 (May 12). Correlations and volatilities are correlation and annual volatility of daily

returns over period from 22nd

May 2002 to 22nd

May 2012, unless otherwise stated. Sharpe ratios are based on 10 year returns, 10 year volatility and a risk free rate of 1.04% (average of US 5Yr

rates over 1 year).


ETFS Cocoa* -1% 3% -26% -19% -3% 17% 0.22 0.21 0.13 0.19 32% 0.02

Energy

May 12 YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs FTSE 100Eurostoxx

50S&P 500 DAX30

Energy

ETFS Energy DJ-UBSCISM* -1% -9% -23% -27% -63% -37% 0.29 0.27 0.21 0.25 32% -0.17

ETFS Forward Energy DJ-UBSCI-F3SM* -2% -7% -19% -15% -43% 82% 0.32 0.30 0.23 0.28 27% 0.19

ETFS Petroleum DJ-UBSCISM* -10% -3% -4% 21% -19% 121% 0.35 0.31 0.25 0.25 34% 0.21


Sharpe Ratio

ETFS Forward Petroleum DJ-UBSCI-F3SM* -10% -3% -4% 33% 16% 384% 0.37 0.33 0.26 0.25 31% 0.52

ETFS Natural Gas* 26% -27% -58% -81% -95% -97% 0.09 0.10 0.08 0.10 47% -0.67

ETFS Forward Natural Gas* 19% -17% -49% -71% -89% -82% 0.11 0.11 0.08 0.11 35% -0.48

ETFS WTI Crude Oil* -11% -9% -10% 4% -33% 76% 0.36 0.32 0.26 0.30 35% 0.14

ETFS WTI Forward Crude Oil* -11% -8% -8% 22% 9% 346% 0.36 0.32 0.25 0.30 33% 0.46

ETFS Brent Crude* -9% 2% 3% 58% 17% 281% 0.36 0.32 0.25 0.30 33% 0.40

ETFS Forward Brent Crude* -9% 2% 1% 53% 22% 351% 0.37 0.33 0.26 0.31 30% 0.50

ETFS Gasoline* -8% 8% 9% 64% 12% 217% 0.32 0.28 0.22 0.25 37% 0.30

ETFS Heating Oil* -9% 0% -1% 43% 2% 184% 0.30 0.27 0.21 0.25 34% 0.29

ETFS Forward Heating Oil* -8% 1% 0% 43% 17% 381% 0.32 0.28 0.22 0.26 30% 0.53

ETFS Brent 1 mth** -8% 3% 5% 69% 19% 260% 0.35 0.31 0.23 0.28 35% 0.36

ETFS WTI 2 mth** -11% -9% -10% 12% -7% 208% 0.36 0.32 0.26 0.30 35% 0.31

ETFS Brent 1yr** -8% 3% 1% 52% 44% 533% 0.38 0.34 0.26 0.32 27% 0.71

ETFS Brent 2yr** -6% 3% 0% 43% 50% 535% 0.37 0.33 0.24 0.30 24% 0.81

ETFS Brent 3yr** -5% 2% -2% 33% 50% n.a. 0.43 0.40 0.30 0.38 24% n.a.

ETFS WTI 1yr** -10% -4% -6% 30% 29% 444% 0.39 0.35 0.27 0.33 28% 0.63




May 2002 (10 Yrs), 2007 (5 Yrs),

2009 (3 Yrs), 22nd

May 2011 (1 Yr), 31st


April to 22nd


period from 22nd

May 2002 to 22nd


year).

*These products track indices priced off futures returns.

** These products track futures prices directly.

ETFS WTI 1yr** -10% -4% -6% 30% 29% 444% 0.39 0.35 0.27 0.33 28% 0.63

ETFS WTI 2yr** -12% -4% -15% 16% 26% 641% 0.24 0.28 -0.01 0.23 29% 0.73

ETFS WTI 3yr** -10% -4% -16% 10% 26% 604% 0.22 0.26 -0.02 0.22 28% 0.74

ETFS Carbon** 0% 0% -57% -58% -70% n.a. 0.19 0.21 0.06 0.20 40% n.a.

Appendix (1):Scenario analysis: what performs when growth is ris ing

Palladium and Copper ETCs Outperformed when Growth was Rising

4%

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the above indexes during the best 20% months of growth performance over the past 5 years.

Important Information

GeneralThis communication has been provided by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Services Authority. The products discussed in this document are issued by ETFS CommoditySecurities Limited (“CSL”), ETFS Hedged Commodity Securities Limited (“HCSL”), ETFS Foreign Exchange Limited (“FXL”), ETFS Industrial Metal Securities Limited (“IML”), ETFS Metal Securities Limited (“MSL”), ETFS Oil Securities Limited(“OSL”), Gold Bullion Securities Limited (“GBS” and together with CSL, HCSL, FXL, IML, MSL and OSL the “Issuers”) and ETFX Fund Company plc (the “Company”). Each Issuer is regulated by the Jersey Financial Services Commission. TheCompany is an open-ended investment company with variable capital having segregated liability between its sub-funds (each a “Fund”) and is organised under the laws of Ireland. The Company is regulated, and has been authorised as a UCITSby the Central Bank of Ireland (the “Financial Regulator”) pursuant to the European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations, 2003 (as amended).When being made within Italy, this communication is for the exclusive use of the “qualified investors” and its circulation among the public is prohibited.When being made within Switzerland, this communication is for the exclusive use by “Qualified Investors” (within the meaning of Article 10 of Section 3 of the Swiss Collective Investment Schemes Act (“CISA”) and its circulation among the public isprohibited.This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares in the United States or any province or territory thereof, where none of the Issuers, theCompany or any securities issued by them are authorised or registered for distribution and where no prospectus for any of the Issuers or the Company has been filed with any securities commission or regulatory authority. Neither this document norany copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States. Neither the Issuers, the Company nor any securities issued by them have been or will be registered under the United States Securities Act ofany copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States. Neither the Issuers, the Company nor any securities issued by them have been or will be registered under the United States Securities Act of1933 or the Investment Company Act of 1940 or qualified under any applicable state securities statutes.This document may contain independent market commentary prepared by ETFS UK based on publicly available information. ETFS UK does not warrant or guarantee the accuracy or correctness of any information contained herein and anyopinions related to product or market activity may change. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data.Any historical performance included in this document may be based on back testing. Back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actualperformance and should not be interpreted as an indication of actual or future performance.Historical performance is not an indication of or a guide to future performance.The information contained in this communication is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision.ETFS UK is required by the United Kingdom Financial Services Authority ("FSA") 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 notprovide 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 tobelieve 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.Risk WarningsSecurities issued by CSL, HCSL, FXL and OSL are complex, structured products involving a significant degree of risk and are not suitable for all types of investor. Securities offered by the Issuers and the Company are aimed at sophisticated,professional and institutional investors. Any decision to invest should be based on the information contained in the prospectus (and any supplements thereto) of the relevant Issuer or the Company which includes, inter alia, information on certainrisks associated with an investment. The price of any securities may go up or down and an investor may not get back the amount invested. Securities may be priced in US Dollars, Euros, or Sterling, and the value of the investment in othercurrencies will be affected by exchange rate movements. Investments in the securities of the Issuers or the shares of the Company which provide a short and/or leveraged exposure are only suitable for sophisticated, professional and institutionalinvestors investors who understand leveraged and compounded daily returns and are willing to magnify potential losses by comparison to investments which do not incorporate these strategies. Over periods of greater than one day, investmentswith a short and/or leveraged exposure do not necessarily provide investors with a return equivalent to a return from the unleveraged long or unleveraged short investments multiplied by the relevant leverage factor.Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuers and the Company.The relevant prospectus for each Issuer and the Company may be obtained from www.etfsecurities.com. Please contact ETFS UK at +44 20 7448 4330 or [email protected] for more information.IssuersGeneral: The FSA has delivered to the regulators listed below certificates of approval attesting that the prospectuses of the Issuers indicated have been drawn up in accordance with Directive 2003/71/EC.For Dutch, French, German and Italian Investors: The prospectuses (and any supplements thereto) for each of the Issuers have been passported from the United Kingdom into France, Germany, Italy and the Netherlands and have been filed withthe l’Autorité des Marchés Financiers (AMF) in France , Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) in Germany, CONSOB and the Bank of Italy in Italy and the Authority Financial Markets (Autoriteit Financiële Markten) in theNetherlands. Copies of prospectuses (and any supplements thereto) and related regulatory documentation, including annual reports, can be obtained in France from HSBC France, 103, Avenue des Champs Elysées, 75008 Paris. , in Germanyfrom HSBC Trinkhaus & Burkhardt, AG, Konsortialgeschäft, Königsalle 21/23, 40212 Dusseldorf and in the Netherlands from ABN AMRO Bank (Nederland) N.V. (t) +31 20 527 2467 or faxed request to +31 20 527 1928. The prospectuses (and anysupplements thereto) for each of the Issuers may be distributed to investors in France, Germany, Italy and the Netherlands.


supplements thereto) for each of the Issuers may be distributed to investors in France, Germany, Italy and the Netherlands.This document is not a financial analysis pursuant to Section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG ) and consequently does not meet all legal requirem ents to warrant the objectivity of a financial analysis and is also not subject to the b an on trading prior to the publication of a financi al analysis.This document is not addressed to or intended directly or indirectly, to (a) any persons who do not qualify as qualified investors (gekwalificeerde beleggers) within the meaning of section 1:1 of the Dutch Financial Supervision Act as amended from time to time; and/or (b) in circumstances where other exemptions or dispensations from the prohibition the Dutch Financial Supervision Act or the Exemption Regulation of the Act on Financial Supervision apply.None of the Issuers is required to have a license pursuant to the Dutch Financial Supervision Act as it is exempt from any licensing requirements and is not regulated by the Netherlands Authority for the Financial Markets and consequently no prudential and conduct of business supervision will be exercised.For Austrian, Danish, Finnish, Portuguese, Spanish and Swedish Investors: The prospectuses (and any supplements thereto) for each of CSL, HCSL, IML, MSL and FXL have been passported from the United Kingdom into Austria, Denmark, Finland, Portugal, Spain, Sweden and have been filed with Österreichische Finanzmarktaufsicht (Austrian Financial Market Authority) in Austria, Finanstilsynet (Financial Supervisory Authority) in Denmark, Finanssivalvonta (Finnish Financial Supervisory Authority) in Finland, , Comissão do Mercado de Valores Mobiliários (Portuguese Securities Market Commission) in Portugal, Comisión Nacional del Mercado de Valores (Securities Market Commission) in Spain and the Finansinspektionen (Financial Supervisory Authority) in Sweden. The prospectuses (and any supplements thereto) for these entities may be distributed to investors in Austria, Finland, Portugal, Spain, Denmark and Sweden. For Belgian Investors: The prospectus (and any supplements thereto) for GBS has been passported from the United Kingdom into Belgium and has been filed with the Commission Bancair, Financiére et des Assurances in Belgium. The prospectus (and any supplements thereto) for GBS may be distributed to investors in Belgium.

Other than as set out above investors may contact ETFS UK at +44 (0)20 7448 4330 or at [email protected] to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a “private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG (“UBS”), Merrill Lynch Commodities Inc. (“MLCI”), Merrill Lynch International (“MLI”), Bank of America Corporation (“BAC”), Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Morgan Stanley & Co International plc, Morgan Stanley & Co. Incorporated, Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS, MLCI, MLI, BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Morgan Stanley & Co International plc, Morgan Stanley & Co. Incorporated and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

“Dow Jones,” “UBS”, DJ-UBS CISM,”, “DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (“Dow Jones”), CME Group Index Services LLC (“CME Indexes”), UBS or UBS Securities LLC (“UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL and HCSL although based on components of the Dow Jones UBS Commodity IndexM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.

The Morgan Stanley Indices are the exclusive property of Morgan Stanley & Co. Incorporated (“Morgan Stanley”). Morgan Stanley and the Morgan Stanley index names are service mark(s) of Morgan Stanley or its affiliates and have been licensed for use for certain purposes by ETF Securities Limited in respect of the securities issued by FXL. The securities issued by FXL are not sponsored, endorsed, or promoted by Morgan Stanley, and Morgan Stanley bears no liability with respect to any such financial securities. The prospectus of FXL contains a more detailed description of the limited relationship Morgan Stanley has with FXL and any related financial securities. No purchaser, seller or holder of securities issued by FXL, or any other person financial securities. The prospectus of FXL contains a more detailed description of the limited relationship Morgan Stanley has with FXL and any related financial securities. No purchaser, seller or holder of securities issued by FXL, or any other person or entity, should use or refer to any Morgan Stanley trade name, trademark or service mark to sponsor, endorse, market or promote this product without first contacting Morgan Stanley to determine whether Morgan Stanley’s permission is required. Under no circumstances may any person or entity claim any affiliation with Morgan Stanley without the prior written permission of Morgan Stanley.

Funds

This document has prepared for delivery to professional investors in the Republic of Ireland and other countries of the European Union/European Economic Area in which certain of the Funds are registered with the local financial regulator. Please contact ETFS UK at +44 (0)20 7448 4330 or at [email protected] for further information of the Company and details as to which countries and to which category of investors this document can be communicated.

� For Danish Investors: This document cannot be communicated to investors in Denmark except in response to their unsolicited request.

� For Dutch Investors: Each Fund has been registered with the Netherlands Authority for the Financial Markets following the UCITS passport-procedure pursuant to section 2:72 of the Dutch Financial Supervision Act.

� For French investors: Any subscription for shares of the Funds will be made on the basis of the terms of the prospectus, the simplified prospectus and any supplements or addenda thereto. The Company is a UCITS governed by Irish legislation and approved by the Financial Regulator as UCITS compliant with European regulations although may not have to comply with the same rules as those applicable to a similar product approved in France. Certain of the Funds have been registered for marketing in France by the Authority Financial Markets (Autorité des Marchés Financiers) and may be distributed to investors in France. Copies of all documents (i.e. the prospectus, the simplified prospectus, any supplements or addenda thereto, the latest annual reports and the memorandum of incorporation and articles of association) are available in France, free of charge, at the French Centralizing Agent, Société Générale, Securities Services, at 29 Boulevard Haussmann – 75009 Paris – France.

� For German investors: The offering of the shares of the ETFX AEX® Fund an d of the ETFX AMX® Fund has not been notified to th e German Financial Services Supervisory Authority i n accordance with Section 132 of the Investment Act. Shares of the ETFX AEX® Fund and of the ETFX AMX® Fund may not be publicly offered to the investors of the Federal Republic of Germany.

� The offering of the shares of the remaining Funds has been notified to the German Financial Services Supervisory Authority in accordance with section 132 of the German Investment Act. The prospectus, the simplified prospectuses, any supplements or addenda thereto, copies of the Memorandum and Articles of Association of the Company and the annual and semi-annual report can be obtained free of charge upon request at the Paying and Information Agent in Germany, HSBC Trinkaus & Burkhardt AG, Königsallee 21-23, 40212 Düsseldorf. The current offering and redemption prices as well as the net asset value and possible notifications of the investors can also be requested free of charge at the same address. In Germany the shares will be settled as co-owner shares in a Global Bearer certificate issued by Clearstream Banking AG. This type of settlement only occurs in Germany because there is no direct link between the English and German clearing and settlement systems Crest and Clearstream. For this reason the ISIN used for trading of the shares in Germany differs from the ISIN used in other countries.

� For Norwegian Investors: The Company and certain of the Funds have been registered with the Financial Supervisory Authority of Norway (Finanstilsynet), and may be marketed and sold to professional investors in Norway.


� Other than as separately indicated, this communication is being made on a “private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

� None of the index providers of the Funds referred to herein nor their licensors make any warranty or representation whatsoever either as to the results 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 shall be liable to any person for any errors or significant delays in the relevant indices nor shall be under any obligation to advise any person of any error or significant delay therein.

�

June 2012 monthly sales presentation usd mexico

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Transcript of June 2012 monthly sales presentation usd mexico