September inflows lead to record holdings in gold ETFs

Oct 14th, 2019 | By | Category: Commodities

Total holdings in gold-backed ETFs (and ETPs) reached a new record high of 2,808 tonnes at the end of September, following 75.2t ($3.9 billion) of net inflows during the month, according to data from World Gold Council.

September inflows lead to record holdings in gold ETFs

Total holdings in global gold-backed ETFs reached a new record of 2,808 tonnes in September.

The record was achieved despite a reversal in the recent gold price rally – the price of gold fell by 3% to $1,470/oz in September after having increased by 20% during the previous four months.

At the time the previous record was set in late 2012 – before the start of a commodity bear market that lasted until January 2016 – the gold price was approximately 18% higher than current levels, highlighting the contribution of investor inflows in reaching the new peak.

World Gold Council notes that the gold-backed ETF landscape has changed significantly since 2012 when two-thirds of global holdings were concentrated in North America.

Today, North America and Europe make up 52% and 44% of global holdings respectively, with the remainder coming from funds listed in Asia and other regions.

September flows

Gold ETFs listed in North America led September’s global flows, adding 62.1t ($3.1bn, 4.5% of AUM), representing 83% of global net inflows.

The largest gold ETFs drove the bulk of inflows with the $44.7bn SPDR Gold Shares (GLD US) pulling in 42.5t ($2.1bn, 4.9%) and the $16.8bn iShares Gold Trust (IAU US) attracting 16.2t ($789 million, 4.9%).

Low-cost gold ETFs, defined as those with expense ratios of 0.20% or less, continued to grow, accumulating 2.9t during the month and bringing their collective holdings to 61t, worth $2.9bn. The SPDR Gold Mini Shares (GLDM US), which passed the $1bn AUM milestone during September, led the field among low-cost gold ETFs, adding 2.5t ($122m, 13%).

Europe-listed gold ETFs brought in 7.7t ($586m, 1.0%), mainly in the UK, as investors positioned for an impending Brexit decision. The Xtrackers Physical Gold Euro Hedged ETC (XAD1 GR) added 3.5t ($193m, 8.7%) and the WisdomTree Physical Gold (PHAU LN) gained 3.6t ($176m, 7.8%).

Funds in Asia had another month of strong inflows at 3.9t ($187m, 4.6%), primarily driven by Chinese funds.

Year-to date trends

Global gold ETFs have added 368t ($17.9bn, 13.4%) YTD, as of the end of September, driven by strong inflows in the past four months.

European funds have grown consistently this year, seeing positive flows in all months except April. UK-based gold ETF holdings continue to reach all-time highs.

Strong inflows in North American-listed gold ETFs over the past five months have increased the regions’ contribution to 2019 growth – as of the end of September, North America added 214t (58% of global flows) compared to 146t (40%) in Europe.

Low-cost gold ETFs in the US have seen positive flows for 15 of the past 16 months and have increased their collective holdings by 51% so far this year

Asian-listed gold ETFs have reversed strong outflows of over 12% at the start of the year and have now grown 8% YTD.

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