ETVs are simple and transparent open-ended securities which trade on regulated exchanges. ETVs enable investors to gain exposure to assets without trading futures or taking physical delivery. ETFS-branded ETVs are secured, undated, zero coupon notes that are designed to accurately track the underlying asset index or individual asset.
ETVs are similar to ETFs because they are both open-ended, continuously traded and have multiple market makers. The main difference is that ETVs use a secured, undated, zero coupon note structure, whereas ETFs typically use a fund structure.
ETVs priced off futures are almost 100% correlated with the underlying asset price, however the spot price return is not an investable return. ETVs are designed to earn a return similar to that which could be earned from investing in the underlying asset futures markets.
ETVs are total return securities, and as such earn a collateral yield (interest rate) that is capitalised into the price of the security. No dividends are paid.
Similar to ETFs, ETVs are open-ended securities, and therefore Authorised Participants (who are generally investment banks with assets expertise) can create or redeem ETVs at their underlying value or NAV.
ETVs are open-ended, therefore new ETVs can be created by Authorised Participants according to demand. Therefore, the liquidity of ETVs reflects the liquidity of the underlying assets futures markets.
No, although your broker or financial advisor will also charge you normal transactions costs (commissions) associated with the purchase or sale of ETVs.
Investors should consult their own professional advisers as to the implications of their subscribing for, purchasing, holding, switching or disposing of ETVs under the laws of the jurisdiction in which they may be subject to tax. Tax legislation may change.
