Amundi offers Europe’s cheapest gold ETC after fee cut

Mar 17th, 2020 | By | Category: Commodities

Amundi has reduced the expense ratio on its $1.7 billion physical gold ETC from 0.19% to 0.15%.

Nicolas Fragneau, Head of ETF Product Specialists at Amundi.

Following the price cut, the Amundi Physical Gold 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.

It is listed in euros on Euronext Paris (GOLD FP) and Xetra (GLDA GY) as well as in US dollars on Euronext Amsterdam (GOLD NA).

Investing in gold has historically contributed several portfolio benefits. The precious metal acts as a hedge against inflation and offers diversification potential due to its low correlation with traditional asset classes.

It is also a perceived safe haven, providing a degree of portfolio resilience during periods of market uncertainty. This factor has led to strong demand for gold investment lately as equity markets reel from the impact of the coronavirus outbreak – according to the World Gold Council, gold ETPs globally experienced net inflows of $4.9bn in February, increasing their collective holdings to a new record high.

Nicolas Fragneau, Head of ETF Product Specialists at Amundi, commented, “Gold has such an important role to play in times of uncertainty. Our aim was to make it as cheap, easy and safe as possible for investors to add this precious commodity to their portfolio.”

In very recent days, gold, along with other precious metals, has sold off somewhat, raising potential question-marks over the metal’s supposed safe-haven status. However, most market commentators attribute the sell-off to forced selling from leveraged investors, including hedge funds, urgently requiring liquidity to settle margin calls arising from loss-making equity and credit positions.

Rival providers of low-cost gold ETPs in Europe, such as Invesco and iShares, will likely consider their next move following Amundi’s price cut. The $8.2bn Invesco Physical Gold ETC (SGLD LN) and $8.9bn iShares Physical Gold ETC (SGLN LN) both come with expense ratios of 0.19% following a series of fee reductions and previously shared the accolade of Europe’s cheapest gold ETP with Amundi.

Tags: , , , , , ,

Leave a Comment