The Royal Mint’s physical gold ETC – the Royal Mint Physical Gold ETC (RMAU) – has enjoyed steady interest from investors in 2022, consistently attracting net new assets despite a challenging gold market environment.
The Royal Mint Physical Gold ETC offers investors a sustainable vehicle for gold exposure.
RMAU has recorded positive net inflows in every month of this year, picking up $450 million in net new assets between 1 January and 31 October and driving the ETC’s total assets under management to a new milestone of $650m.
Demand remains strong for RMAU which attracted $75m net inflows in September and October while Europe’s two largest gold ETPs – the $13.7bn Invesco Physical Gold ETC (SGLD LN) and $12.9bn iShares Physical Gold ETC (IGLN LN) – saw net redemptions of $792m and $268m, respectively, over the same period.
RMAU’s persistent net inflows have occurred despite the price of bullion falling 10.0% from the start of the year (as of 31 October). While increased geopolitical tensions over Russia’s invasion of Ukraine, as well as persistently high inflation, have both been bullish for gold price performance, the yellow metal has been weighed down by the strength of the US dollar and rapidly rising interest rates – the yield on the 10-year US Treasury Note is currently trading at 4.1%, up from about 1.5% at the start of the year (non-interest-bearing assets such as gold suffer when bond yields increase).
According to white-label ETP platform HANetf, which helped the Royal Mint bring RMAU to market in 2020, the consistent demand for the ETC reflects its robust ESG credentials and its unique custody arrangement which provides investors with an additional layer of diversification.
RMAU’s gold is stored in the Royal Mint’s ultra-secure vault in South Wales, located outside of the mainstream financial ecosystem. This is in stark contrast to the vast majority of gold ETCs domiciled in Europe which concentrate their gold holdings in the vaults of either HSBC or JP Morgan in London.
The product is also the first ETC to be 100% backed by responsibly sourced gold in line with the London Bullion Market Association’s 2019 standards. This ensures, on a best endeavours basis, that gold acquired for the ETC is from wholly legitimate and conflict-free sources. Additionally, the ETC is backed in part by gold bars that have been cast from 100% recycled gold sourced from scraps in the manufacturing process.
Another feature that differentiates RMAU is its physical redemption facility. Investors in the ETC are able to redeem their shares for physical gold bars or bullion coins issued by the Royal Mint, a mechanism that is totally unique to RMAU.
Hector McNeil, co-CEO and co-Founder of HANetf, said: “We launched RMAU just two years ago and are delighted to see it exceed $650m in AUM over such a short period of time. These inflows are especially impressive given the poor performance of gold’s spot price in recent weeks.
“While gold is a staple of many portfolios, some investors are concerned about whether it meets their sustainable values. RMAU offers a unique way to gain exposure to responsibly sourced gold, allowing investors to access gold that aligns with their values.”
RMAU is listed on London Stock Exchange in US dollars and pound sterling, as well as on Xetra, Borsa Italiana, and Euronext Paris in euros.
It comes with a total expense ratio of 0.22%.