Aberdeen Standard’s gold ETF back above $1bn AUM

Aug 10th, 2019 | By | Category: Commodities

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The Aberdeen Standard Physical Gold Shares ETF (SGOL US) is back above $1 billion in assets under management.

Aberdeen Standard’s low-cost gold ETF returns to $1bn AUM

Gold has enjoyed a sustained rally this year, rising over 16% year-to-date, as of 9 August 2019.

The fund, which is the third-largest US gold ETF, is backed by physical gold and provides exposure to changes in the metal’s spot price.

Aberdeen Standard assumed control of the ETF in the first half of 2018 as part of its acquisition of ETF Securities’ US operations.

Assets in the fund were $1.1 billion at the time of the purchase and have been much higher, topping $2bn in late September / early October 2012.

However, assets fell to as low as $772m as investors took advantage of lower-cost products offered by rivals.

This occasion is significant in that it represents the first time the fund has crossed the milestone since Aberdeen Standard reduced the ETF’s sponsor fee from 0.39% to 0.17% in December 2018.

Slashing the fee, which established the fund as the joint-cheapest gold ETP in the US, alongside the GraniteShares Gold Trust (BAR US), appears to have been relatively successful in stoking demand for the fund.

The product also trades commission-free on the TD Ameritrade and Charles Schwab fund platforms, further lowering the cost to investors.

Data from World Gold Council shows that low-cost gold ETFs in the US – those with expense ratios below 20 basis points – have seen positive flows for 13 of the past 14 months and have increased their collective AUM by 54% between the start of the year and July month-end.

While the fund is undoubtedly a beneficiary of this trend, the main contributor to it reaching the $1bn milestone has, of course, been the rally in the gold price. Driven by economic concerns, trade tensions, geopolitical risks, and a more accommodative stance in global monetary policy, the spot price of gold is up over 16% YTD (9 August 2019).

Steven Dunn, Head of ETFs at Aberdeen Standard Investments, commented, “The recent market volatility generated by fears around global trade and geopolitical tensions has certainly increased clients’ appetite for gold, with the precious metal at six-year highs. This really vindicates the view that the only good time for investors to have gold in their portfolio is all of the time.”

“SGOL is well-positioned to benefit from the current demand for gold because it is the cheapest way for US investors to track the price of bullion and the fund is easily accessible commission-free through two of the largest retail platforms.”

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