Xetra-Gold (ISIN: DE000A0S9GB0), the first financial product combining the benefits of physical gold with exchange-traded securities is being launched to investors on the Luxembourg market by Deutsche Börse Commodities after its successful introduction in Germany in December 2007.
Xetra-Gold is a bearer's note that can be bought and sold via Deutsche Börse's Xetra trading platform and every unit represents the option of one gram of gold to be delivered. The securities issued can be traded on an ongoing basis without delay and - if so requested - can be exchanged for the underlying physical amount of gold via the private investor's own bank. Thus Xetra-Gold combines the benefits of physical gold with the low cost of trading securities on Xetra making it an ideal product for risk diversification. Exchange-based trading makes Xetra-Gold a fungible and liquid security with a transparent pricing process. The issued security fulfils the specific European criteria for investments funds (so called UCITS criteria), making it eligible for institutional investors such as investment funds.
Clearstream Banking Franfurt AG, a Deutsche Börse subsidiary, stores the gold in its vault. Umicore AG & Co. KG, an industry partner, supplies, checks and handles the physical gold. The safe custody of the gold reserves at Clearstream meets the highest security standards and saves investors the costs of transporting and storing physical gold.
Deutsche Börse Commodities GmbH is a joint venture launched in November 2007 by Deutsche Börse AG and its partners Bankhaus Metzler, Bank Vontobel, Commerzbank AG, Deutsche Bank AG, DZ Bank AG and Umicore AG & Co. KG. The aim of the new company is to offer innovative types of securitization for commodities and to ensure cost-effective trading in an alliance with the partners.
Martina Gruber, managing director of Deutsche Börse Commodities Gmbh, said "We are delighted to introduce Xetra-Gold to the Luxembourg market. We believe it will encounter the same success in the Grand Duchy it has received on the German market where results have exceeded expectations."
Of the 114 exchange-traded commodities listed on the Frankfurt Stock Exchange, Xetra-Gold has the highest turnover. The orderbook turnover in october recorded at €190,8 million, which equates to 49 percent of all turnover for exchange-traded commodities.
Steffen Orben, managing director of Deutsche Börse Commodities GmbH, said "With innovative securitizations, we offer investors direct access to the commodities market and a cost-effective opportunity to diversify their portfolios which is particularly valuable in times of market turmoil."