FAQ ETCs

Xtrackers Exchange Traded Commodities (ETCs) are physically-backed securities offering investors exposure to a commodity’s spot price without having to trade futures or other derivatives, or take physical delivery of the commodity. They trade on regulated exchanges, are typically quoted continuously during an exchange’s trading hours, and can be bought and sold via an intermediary such as a broker.

The products are intended for all types of investors (retail and professional), who want to gain exposure to commodity prices but are also prepared to accept and are able to bear the risk up to a total loss of capital invested.

Xtrackers currently offers ETCs providing exposure to gold, silver, platinum and rhodium.

Both ETFs and ETCs are designed to track the price of underlying assets, but whereas Xtrackers ETFs are structured as funds, Xtrackers ETCs are structured as secured debt notes referenced to the relevant commodity price. 

More information on Xtrackers ETFs can be found here.

The word ‘physical’ in the description of Xtrackers ETCs refers to the fact that they are fully backed by the underlying commodity, which is owned by the issuer and securely held in vaults by the precious metal agent. Each ETC series has exclusive title over an allocated pool of the respective precious metal. For efficiency reasons Xtrackers ETCs do not offer physical delivery of the backed precious metals.

An investment in an Xtrackers ETC may not be suitable for all investors. Xtrackers ETCs are not principal or capital protected investments, therefore investors should be prepared and able to sustain losses up to the total loss of the capital invested. Prices of precious metals are generally more volatile than prices of other asset classes. Substantial fluctuations of the value of the investment for precious metal ETCs are possible even over short periods of time. . Investments in ETC securities will not accrue any interest and performance is subject to the deduction of the product fee. Investing in precious metal ETC securities will not make an investor the owner of the relevant metal. Pricing of the ETC securities on the secondary market may be at a significant discount or premium compared to the Value per ETC Security (intrinsic value) published by the Issuer.

Investments in Xtrackers ETCs involve numerous risks including but not limited to, general market risks relating to the relevant commodities, exchange rate risks, interest rate risks, inflationary risks, liquidity risks, and legal and regulatory risks. Movements in exchange rates can impact the value of your investment. If the currency of your country of residence is different from the currency in which the underlying investments of the fund are made, the value of your investment may increase or decrease subject to movements in exchange rates.  For currency hedged ETCs, in case the issuer has made a profit on a currency hedging component between relevant observation dates, the issuer and the investors will have an unsecured credit exposure to the Series Counterparty for such a profit being settled for up to two business days following each valuation day. The value of an investment in Xtrackers ETC securities may go down as well as up. Past performance is not a reliable indicator of future performance. For a full description of risk factors, please refer to the relevant prospectus. 

The costs and fees associated with operating and managing an Xtrackers ETC are embedded in the investment by reducing the amount of underlying commodity that the ETC provides exposure to from time to time (the ‘metal entitlement’). They are shown in each ETC’s Factsheet as the ‘Product Fee’. The investor may also incur brokerage or advisory fees.

Movements in exchange rates can impact the value of your investment. Please refer to the question ‘What are the risks of investing in Xtrackers ETCs?’ above for further information. For a full description of risk factors, please refer to the relevant prospectus.

Each share of an Xtrackers gold ETC is linked to an amount of gold (the ‘metal entitlement’), which is altered daily to reflect the issuer’s fee. The gold is owned by the issuer and held by the metal agent (JPMorgan Chase Bank N.A.) to cover the ETC’s obligations. The daily value per security comprises the 3pm London time fixing by the London Bullion Market Association (LBMA) multiplied by the relevant metal entitlement. (Please note, this value is not the secondary market price). On redemption, the metal agent will sell the gold, and the proceeds are used to pay security holders.

More information about Xtrackers ETCs can be found here: ETC product overview.

Xtrackers ETCs can be bought on exchange or through a broker. Investors need to have a securities account at a bank or with an investment platform, which can buy and sell the notes on the relevant exchange. 

Xtrackers Exchange Traded Commodities (ETCs) are physically-backed securities offering investors exposure to a commodity’s spot price without having to trade futures or other derivatives, or take physical delivery of the commodity. They trade on regulated exchanges, are typically quoted continuously during an exchange’s trading hours, and can be bought and sold via an intermediary such as a broker.

The products are intended for all types of investors (retail and professional), who want to gain exposure to commodity prices but are also prepared to accept and are able to bear the risk up to a total loss of capital invested.

Xtrackers ETCs can be bought on exchange or through a broker. Investors need to have a securities account at a bank or with an investment platform, which can buy and sell the notes on the relevant exchange.