WisdomTree adds new listings for low-cost “Core” gold ETC

Mar 19th, 2021 | By | Category: Commodities

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WisdomTree has added new listings for its recently launched low-cost “Core” gold ETP.

WisdomTree rolls out new listings for low-cost gold ETC

WisdomTree has introduced new listings for its low-cost, physically backed gold ETC on London Stock Exchange, Deutsche Börse, and Borsa Italiana.

The new listings relate to the WisdomTree Core Physical Gold, a physically backed gold ETC unveiled on the London Stock Exchange in US dollars (WGLD LN) in December.

The product comes with a fixed annual fee of just 0.15%, the joint-second cheapest amongst comparable gold products domiciled in Europe.

It is 100% backed by responsibly sourced physical gold stored in HSBC’s London vaults.

WisdomTree has now added a pound sterling share class on LSE (GLDW LN) and a euro share class on Deutsche Börse (WGLD GY).

This is in addition to the euro listing on Borsa Italiana (WGLD IM) which was rolled out last month.

Broad range

WisdomTree provides Europe’s broadest range of gold ETPs with $15.6 billion in assets under management across 12 gold products including physically backed, currency-hedged, synthetic, leveraged, and inverse exposures.

The firm’s flagship gold product is the $6.3bn WisdomTree Physical Gold (PHAU LN) which appears virtually identical to its latest ‘core’ offering, except it comes with a pricier management fee of 0.39%. PHAU has been falling out of favour with investors, with over $1.7bn in net assets redeemed from the ETC over the past year (as of 19 March 2021).

At the same time, lower-cost rivals have benefitted from a surge in gold demand – the $12.7bn iShares Physical Gold ETC (SGLN LN), $12.1bn Invesco Physical Gold ETC (SGLD LN), and $2.2bn Amundi Physical Gold ETF (GOLD FP), all priced at 15 basis points, attracted $2.2bn, $2.0bn and $510 million respectively in net inflows over the same period.

Weaker gold price

While gold performed particularly well in 2020, notching up a gain in excess of 25%, the price of bullion is some way off its August peak of $2,070/oz.

According to data from the World Gold Council, gold in US dollar terms had its largest monthly decline in four years during February, dropping 6.5% and finishing the month at $1,743/oz. Meanwhile, gold ETFs globally saw redemptions of $4.6bn, marking the third consecutive month of outflows and the seventh-worst historical monthly holdings loss on record.

The World Gold Council attributes gold’s recent price weakness to rising real rates which increases the opportunity cost of holding non-income-producing assets such as gold. Despite their significant relative increase, the overall level of nominal interest rates remains historically low and real rates across developed markets remain negative.

World Gold Council analysis shows that gold can still perform well when interest rates are under 2% in real terms.

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