The London Stock Exchange will launch a new market segment for Exchange Traded Commodities, the exchange announced today.

The new ETC market will include securities tracking a range of commodities indices covering the energy, metals and agriculture markets. It will contain 32 exchange traded commodities and commodity indices, including 29 issued tomorrow by ETF Securities Ltd. The new commodities segment will enable investors to buy and trade commodities like shares, without the need to access the futures market. In addition there will be 19 individual commodity trackers.

The LSE says that this new market segment is the first of its kind in the world. “London was one of the first exchanges in the world to list gold and oil securities, and we are delighted to be pioneers in becoming the first exchange to offer investors a way to access a broad range of commodities without the need to trade futures and options,” said Martin Graham, director of markets at the LSE. “It will be the first time in the city’s modern history investors have had such straightforward access to these commodities through London’s marketplaces, and the first time that all of these commodities have been available through the same market and the same time-zone.”

”Our new commodities segment is a demonstration of our commitment to giving investors more efficient and transparent ways to create balanced investment portfolios. With 32 exchange traded commodities, an expanding ETFs segment giving access to global equity and bond indices, and REITS set to offer pure property exposure from 2007, the London Stock Exchange is increasingly becoming a multi-asset market,” he added.

Commenting on the launch of the ETCs, Graham Tuckwell, chairman of ETF Securities, said, “We designed ETCs to be simple and secure, open-ended securities. They have lowered many of the barriers that previously prevented some investors from investing in commodities including access, trading and operational risks, custody, and transaction costs. ETCs also provide a pure way of tracking a commodity rather than trying to replicate exposure by trading shares of commodity companies – many of which do not correlate to the underlying commodity, if available at all.”

“ETCs do not involve any of the difficulties with buying and then managing a futures position – such as worrying about margin calls, contracts expiring and rolling positions – or in buying and storing physical commodities,” he added. “The new securities track indices created by Dow Jones Indexes and AIG and each individual commodity index tracks a designated futures contract and is designed to reflect the returns from investing in commodities.”