Amundi lists Europe’s cheapest gold ETC on LSE

May 20th, 2020 | By | Category: Commodities

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Amundi has cross-listed the Amundi Physical Gold ETC on the London Stock Exchange.

Ashley Fagan, Head of ETF, Indexing and Smart Beta Development for UK and Ireland at Amundi

Ashley Fagan, Head of ETF, Indexing and Smart Beta Development for UK and Ireland at Amundi.

With an expense ratio of just 0.15%, the ETC offers the lowest fixed annual fee of any physical gold exchange-traded product available in Europe.

The ETC tracks the LBMA Gold Price, 3pm fix, in USD, through the purchase of physical allocated gold bars which are stored in the London vaults of HSBC.

Gold bars allocated to the ETC are compliant with the London Bullion Market Association’s Responsible Sourcing Program which aims to combat money laundering, terrorist financing, and human rights abuses related to gold production.

The ETC has listed on LSE in pound sterling under the ticker GLDA LN. It is also available in US dollars on Euronext Amsterdam (GOLD NA) as well as in euros on Deutsche Börse Xetra (GLDA GY) and Euronext Paris (GOLD FP).

Ashley Fagan, Head of ETF, Indexing and Smart Beta Development for UK and Ireland at Amundi, said, “With this listing on the London Stock Exchange, we will provide UK investors with a robust, transparent, and cost-efficient way to gain exposure to gold in a local sterling trading line.”

With the price of gold up 13.5% year-to-date and the S&P 500 down 7.8% over the same period, Fagan notes that gold has delivered as a safe-haven asset: “In an environment marked by uncertainty, gold can be used by investors to diversify their portfolios and provide an important long-term hedge against market risks and inflation.”

Investors have continued to increase their exposure to bullion in recent months, seeking to bolster their portfolios from potential further turmoil caused by the Covid-19 pandemic. According to data from the World Gold Council, gold ETFs globally experienced net inflows of $9.3bn in April and $8.1bn in March.

March was the bumper month for the Amundi Physical Gold ETC with $865m gathered over this period, while the ETC has also picked up between $130m and $230m net inflows every month since November 2019. The consistent net inflows, combined with the gold price rally, has driven the ETC’s total assets under management above $2.7bn.

Investors would appear spoilt for choice with physical gold ETCs, but, in reality, they are all remarkably similar.

In addition to its bunker-busting price, the new Amundi ETC differentiates itself from most by owning gold exclusively sourced gold under the LBMA’s responsible sourcing program. Also in this select group is the Royal Mint Physical Gold ETC (RMAU LN). This latter product is further differentiated by its choice of vault – it stores gold outside of the mainstream financial system in The Royal Mint’s nuclear-bomb-proof vault in South Wales.

For liquidity-minded investors and those marshaling significant allocations, long-established products from iShares (IGLN LN), Invesco (SGLD LN)Xetra Gold (4GLD GY), and WisdomTree (PHAU LN) (tickers for USD listings) will probably be on the shortlist. But these products can’t yet guarantee entirely responsibly sourced gold, an increasing concern for many socially conscious investors.

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