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Exchange-traded commodities (ETCs)

ETCs provide an easy, low-cost way to invest in commodities such as precious metals, agricultural products or oil

Benefits of investing in ETCs

ETCs can enable you to:

  • Invest in commodities which are hard to access as an individual investor.
  • Diversify your portfolio.
  • Preserve wealth in times of political and economic stress.
  • Protect against inflation.
  • Take a leveraged or short position.

How do ETCs work?

ETCs are designed to track the performance of a commodity or an index of commodities. The majority take a ‘synthetic’ approach, gaining exposure through the use of derivatives, however some are backed ‘physically’, via direct investment in the commodity.

Similar to Exchange-traded funds (ETFs), ETCs are listed on the stock exchange and traded throughout the day like shares.

ETCs are low cost

ETCs generally have low management charges. Although standard dealing charges apply, most ETCs benefit from being exempt from stamp duty.

ETCs are volatile

This is due to the volatile nature of commodities, which are highly susceptible to changes in supply and demand, caused by weather, natural disasters, political instabilities, epidemics and many other factors. Even commodities traditionally considered as “safe havens” such as gold and silver can still be volatile for example due to interest rates changes or geo-political upheaval.

How to invest in an ETC

Since ETCs can invest in derivatives, they are deemed to be complex investments, and you need to complete an annual appropriateness assessment to ensure you understand the risks involved The easiest way to do this is over the phone, by calling us on 01296 41 43 45. You will then be able to buy and sell ETCs like shares.

Our preferred ETCs