BNP Paribas launches gold and palladium ETCs on Deutsche Börse

Dec 8th, 2016 | By | Category: Commodities

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BNP Paribas has launched two new exchange-traded commodities tracking the price performance of gold and palladium on Deutsche Börse’s Xetra and Frankfurt exchanges.

BNP Paribas launches gold and palladium ETCs on Deutsche Börse

The BNPP Gold ETC (BNQJ) and the BNPP Palladium ETC (BNQL) are based on the cash price in US dollars for a troy ounce of their underlying precious metal.

The BNPP Gold ETC (BNQJ) and the BNPP Palladium ETC (BNQL) are based on the cash price in US dollars for a troy ounce (31.1035g) of their underlying precious metal.

Precious metal ETCs may suit investors looking to improve the risk/return profile of a traditional stock/bond portfolio while gold in particular is known for its safe haven status and may protect investor wealth during serious market downturns.

The metals are also traditionally seen as a good hedge against inflation.

To increase safety for investors BNP Paribas has collateralized the ETCs.  For that purpose securities are posted at Clearstream Banking AG as collateral which, in case of insolvency of the issuer, will be sold and the proceeds distributed to the investors.

Each ETC has a total expense ratio (TER) of 0.99%.

ETF Securities offers an ETC listed on the London market which tracks the performance of gold while providing a collateral yield. The ETFS Gold (LON: BULL) tracks the Bloomberg Gold Subindex. It has $106m in assets under management (AUM) and a TER of 0.49%.

ETCs listed in London which invest directly into either gold or palladium are provided by ETF Securities, Source and iShares.

The ETFS Physical Gold (LON: PHAU) has $5.5bn in AUM and charges a TER OF 0.39%. The ETFS Physical Palladium (LON: PHPD) has $232m in AUM and a TER of 0.49%.

The Source Physical Gold ETC (LON: SGLD) and the Source Physical Palladium ETC (LON: SPAL) are cheaper at TERs of 0.29% and 0.39% respectively. They have current AUMs of $3.5bn and $8m

The iShares Physical Gold ETC (LON: IGLN) is the cheapest at 0.25% fees and AUM of $2.2bn. The iShares Physical Palladium ETC (LON: SPDM) has AUM of $3m and a TER of 0.40%.

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