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Exchange traded commodities (ETCs) have been tradable via Xetra for ten years now. ETCs enable investors to trade individual commodities and commodity indices cost-effective and liquid via the stock exchange.
They complement the wide range of investment opportunities offered by exchange traded funds (ETFs). It is not possible to track individual commodities via ETFs, because ETFs have to be sufficiently diversified at all times in line with the EU UCITS directive. ETCs fill this gap, as they are issued as debt securities and can therefore track individual commodities. Issuers generally back the products by physically depositing commodities or by pledging collateral.
There are currently 202 ETCs from 7 issuers available to investors on Xetra, with assets under management amounting to €25.5 billion. There is at least one designated sponsor for each product, who ensures sufficient liquidity in Xetra trading at all times.
Xetra currently offers trading in four commodity classes: precious metals, industrial metals, energy and agricultural products. Investors can choose between a range of products within the classes. Industrial metals include aluminium, copper, nickel, tin and zinc, while precious metals comprise gold, silver, platinum, and palladium. ETC investments can be made in crude oil, heating oil, petrol and gas in the energy class, and in wheat, sugar, corn, soya beans, coffee, cotton, soya oil, live cattle in the agricultural product class.
The most traded ETCs on Xetra this year include (based on order book turnover from January to November in euros):
1. Xetra-Gold (€2.47 billion)
2. db Physical Gold Euro Hedged ETC (€570.51 million)
3. Source Physical Gold ETC (€526.18 million)
4. db Physical Gold ETC (€272.55 million)
5. ETFS Physical Gold (€256.80 million)
