Paris-headquartered asset manager Amundi has launched a physical gold ETP on Euronext Paris, Euronext Amsterdam and Xetra.
The Amundi Physical Gold ETC comes with an expense ratio of just 0.19%, offering one of the cheapest means to gain exposure to changes in the spot price of gold.
The Amundi Physical Gold ETC comes with a total expense ratio of just 0.19%, providing one of the lowest-cost means of gaining exposure to changes in the spot price of gold.
Exposure to gold has historically offered important benefits to investors’ portfolios.
The commodity can act as a hedge against inflation, while its safe-haven status provides a degree of protection against geopolitical risk.
Conditions may also be favourable for gold going forward as arguably stretched stock valuations, dovish monetary policy, continued political uncertainty in Europe, and unresolved US/China trade issues continue to put upward pressure on the gold price.
The product is backed by physical gold bars which are stored in the London banking vaults of custodian HSBC. Investors making withdrawals from the ETC are entitled to receive the value in cash or gold.
The ETC debuted on Euronext Paris and Euronext Amsterdam on 28th May, with the ticker codes GOLD FP, GOLD NA, and has now been rolled out on Xetra with ticker code GLDA GR.
Commenting on the launch, Fannie Wurtz, Head of Amundi ETF, Indexing & Smart Beta, said, “In an uncertain environment, more and more investors are looking for long-term portfolio protection solutions. That’s why we’re pleased to offer investors the Amundi Physical Gold ETC, a new low-cost solution that enables them to efficiently integrate gold into their allocation.”
The low price tag appears to have made it a popular choice with investors – it has already gathered around $330m in assets – despite stiff competition from more established gold products such as the ETFS Physical Gold and Invesco Physical Gold ETC.
The success of the product lends credibility to research from the World Gold Council which shows a growing trend of lower-cost gold exchange-traded products luring away assets from higher-cost products.
In its April 2019 ETF flows report, the trade body noted that low-cost gold ETPs – those with expense ratios of 0.20% or less – have added $878 million in net new assets over the past nine months, representing growth of 67% and approximately equal to all net inflows in North America over the same period.