Why are some ETCs priced off futures and some priced directly off physical metals?
Some ETCs (ETFS Oil Securities and ETFS Commodity Securities) are priced off futures as it is not possible to store – for long periods – some physical commodities. In addition, futures pricing can be more liquid and efficient for some commodities, especially where the futures contract helps to standardize the pricing – for example, agricultural commodities where quality can vary between crops, seasons and regions. In the case of our ETFS (physical) Metal Securities, precious metals are homogenous, can be stored easily and do not decay, and therefore can be priced directly off the underlying physical commodity.
