ETFS proposes principal reduction for natural gas ETCs

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ETF Securities (ETFS) is proposing to reduce the principal amount for a range of its ETCs due to falls in the price of natural gas.

The product issuer says the change does not affect investors or the price of the ETCs. In a letter to investors sent in November, the issuer said following gradual falls in the value of the Dow Jones-UBS Natural Gas Individual Commodity index, the prices of certain ETCs, including ETFS Natural Gas, fell below their respective principal amounts on 21 October. ETCs are structured as debt securities, meaning they have a principal amount like all bonds, which is usually established at around 10% of the respective ETCs' price at launch. The ETC prices off the respective index and if the...

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