Invesco cuts fee on $4.5bn physical gold ETC

Dec 17th, 2018 | By | Category: Commodities

Invesco has reduced the annual fee on its $4.5 billion physical gold ETC from 0.29% to 0.24%.


The Invesco Physical Gold ETC now charges a fixed annual fee of 0.24%.

Following the price cut, the Invesco Physical Gold ETC now offers the lowest overall cost of any gold ETP available in Europe.

“Gold could provide useful diversification for investors who are worried about volatile equity markets and the possible impact of slowing economic growth, trade wars and Brexit,” said Chris Mellor, Head of EMEA ETF Commodity Product Management at Invesco.

“One of the big attractions of gold as an investment is that it tends to behave differently than other asset classes, especially equities. For investors considering adding exposure, we’ve just made it even more attractive from a cost perspective.”

The ETC tracks the LBMA Gold Price 3pm fix, in USD, through the purchase of physical allocated gold bars which are stored securely in the London vaults of JP Morgan Chase Bank. It is listed on the London Stock Exchange and available for trading in US dollars (SGLD LN) or pound sterling (SGLP LN).

Owing to its size and established track record, the ETC trades with a tight bid-offer spread, typically around three basis points.

The LBMA gold price benchmark is owned by the London Bullion Market Association and calculated by ICE Benchmark Administration. It is the foremost price barometer of gold traded in daily London auctions and is based on prices collated from major London-based banks and branches, and trading houses, including names such as Bank of China, Goldman Sachs, HSBC, JP Morgan, Koch Supply & Trading, and ScotiaMocatta. In total, 13 direct participants have been accredited to contribute to benchmark.

For the average investor (institutional, professional or retail), buying into a listed gold product, such as the Invesco ETC, is much more cost-efficient and practical than purchasing and holding actual gold, which involves arranging transportation, storage and insurance.

Demand for gold has been increasing in recent months as investors look to fortify their portfolios amid rising market volatility and geopolitical tensions.

According to Morningstar, more than $1 billion of net assets have gone into gold ETPs listed in Europe between 1 October and 10 December, with the Invesco Physical Gold ETC capturing approximately $190 million.

(Prior to 27 March 2018, the product was called the Source Physical Gold ETC.)

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