What are Exchange Traded Commodities (ETCs)?
(ETCs) are investment vehicles (asset backed bonds) that track the performance of an underlying commodity index including total return indices based on a single commodity.
Similar to Exchange Traded Funds (ETFs) and traded and settled exactly like normal shares on their own dedicated segment, ETCs have market maker support with guaranteed liquidity, enabling investors to gain exposure to commodities, on-Exchange, during London hours.
They are open-ended securities so shares in each ETC are created and redeemed on demand by the issuer, as with ETFs and come in two broad forms:
Investors can buy single-commodity ETCs like gold and oil or more exotic variants such as zinc and lean hogs.
Investors can invest in index tracking ETCs giving exposure to a range of underlyings from broad indices to specific sub-indices such as energy or livestock, and all in one trade.