Nicholas Brooks, Head of Research and Investment Strategy, ETF Securities

Nicholas Brooks spends his days analyzing data, watching the markets and poring over reports about the global economy, platinum production in South Africa, sugar production in India and monetary statistics in China. As Head of Research and Investment Strategy at London-based ETF Securities, his job is to make sure that he and his team have a firm understanding of the key long- and shortterm factors affecting the markets driving the performance of the more than $12bn of ETFs his firm has under management.

But sometimes, all the numbers in the world mean nothing compared to seeing it with your own eyes.

"One of my first jobs was as an economist covering the Chinese and Hong Kong economies in the early 1990s. While based in Hong Kong I often traveled to China," says Nicholas, a native New Yorker who joined ETF Securities in 2008. "The growth and activity even back then was astounding. Flying into Kai Tak airport in the center of Hong Kong, you could see ships loading and unloading, people thronging the streets buying and selling things 24 hours a day. The sense of activity, industry and entrepreneurial energy was incredible then, and it hasn't changed to this day. The only difference now is that the Chinese economy is more than six times the size."

Nicholas and his team try to juggle the hard facts with global realities to create the best analysis possible. From his office in The City, he talks about what excites him the most right now: commodities, and specifically, the commodity indexes that many of his company's ETFs track.

"In the past, commodity markets were difficult for most investors to access. It was a specialized field. Barriers to entry were high, substantial capital was needed to get access to the market and a sophisticated trading infrastructure needed to be in place. Exchange-listed commodity ETFs, pioneered by ETF Securities, have opened the commodities markets to all investors."

Enter the dragon

Any discussion of commodities has to start with China. Its hunger (and need) for resources dwarfs its Far Eastern neighbors, its fellow emerging market leaders (such as India, Brazil and Russia), and indeed, most of the world. The country's enormous economy and population are the primary sources of commodities demand in the world today.

In Nicholas's view, the Asian giant is the key to understanding commodities markets.

"China's underlying fundamentals are very strong," he explains. "The country's economy is growing rapidly, even in the current global economic environment,

as the government has substantial fiscal and monetary tools at its disposal to maintain strong growth momentum. This contrasts quite starkly with the large fiscal deficits and debt levels most Western countries entered the current crisis with.

"Over past five years, as a high growth has been maintained even as the economy has more than doubled in size, China has gained a 'critical mass' that has had a massive impact on global commodities demand. The economy's sheer size, combined its high growth rate, will continue to drive sustained demand for commodities ranging from oil and copper, to soybeans and iron ore."

The Dow Jones-UBS role

"The Dow Jones-UBS Commodity Indexes have added tremendous variety to ETF Securities' product range," Nicolas says. "The flexibility that those indexes offer is really remarkable. They range from the broadest sectors right down to the smallest subsets. You can measure broad commodities returns, narrow it to grains only, for example, or go right down to the individual commodity level such as cotton, corn, wheat or natural gas. The breakdowns the indexes measure—and the products we can create on these indexes—are unmatched in breadth and depth."

He continues: "Ultimately, what many investors want is a simple, transparent and direct way to tap into the massive growth potential of commodities and, ultimately, the rapid growth of China and other large, rapidly industrializing economies. The DJ-UBS indexes give ETF Securities a means to provide investors a great way to do this."

Nicholas summarizes his market philosophy succinctly: "Wherever markets are going, we know we always need to be one step ahead."