GraniteShares’ AUM surpasses $300m on back of low-cost gold ETP

Jun 29th, 2018 | By | Category: Commodities

GraniteShares has surpassed $300 million in assets under management shortly after the one-year anniversary of its first ETFs.

William Rhind, founder and CEO, GraniteShares.

William Rhind, founder and CEO, GraniteShares.

“We’re delighted to see investors embrace our growing suite of low-cost ETFs in today’s market,” said Will Rhind, founder and CEO of GraniteShares.

“From the beginning, our mission at GraniteShares has been to provide unique solutions for common pain points experienced by investors. This swift accumulation of assets on our platform is a testament to our approach of bringing disruptive solutions to market with better structures and lower management fees.”

Offering commodity and income solutions, the majority of the firm’s AUM success can be attributed to its low-cost gold product – the GraniteShares Gold Trust (BAR US) – which recently reached the $200m milestone.

Launched in September 2017 on NYSE Arca, BAR is a physically backed exchange-traded commodity (ETC) and charges an expense ratio of just 0.20%.

At the time of launch, BAR was the cheapest gold ETP in the marketplace and is still half the price of the $32.3 billion SPDR Gold Shares (GLD US), of which Rhind was formerly CEO.

The World Gold Council and State Street Global Advisors have since launched the SPDR Gold MiniShares Trust (GLDM US) on NYSE Arca. With an expense ratio of 0.18%, GLDM became the cheapest gold ETP in terms of management fee.

BAR was the third fund to be launched in the GraniteShares product suite, joining the GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (COMB US) and the GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF (COMG US), both of which debuted in May 2017.

COMB and COMG provide access to a portfolio of futures contracts tracking a range of commodities. The ETFs are structured as 40 Act funds and do not issue K-1s.

Schedule K-1s are distributed to shareholders of traditional commodity-based ETFs, but the GraniteShares ETFs have avoided this by investing in a wholly-owned subsidiary based in the Cayman Islands which then invests in the underlying commodity futures. By doing so, investors in COMB and COMG will be taxed like a conventional mutual fund and will receive Form 1099 rather than the less favoured K-1s.

“Since inception, BAR and the other ETFs on the GraniteShares platform have continued to gain momentum as more investors recognize the potential benefits of diversifying their portfolios with commodities,” added Rhind. “We believe GraniteShares’ cost effective, No K-1 fund structures make its ETF suite an attractive choice for investors looking to hedge against rising inflationary indicators, a weaker dollar and periods of stock market volatility.”

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