Two Low-Cost Gold ETFs See AUM Exceed $300 As Investors Look For Safe-Havens
(Kitco News)-Investors appear to be the clear winners in the ongoing fee waramong gold-backed exchange traded funds.
This past month has been a milestone for two low-cost gold-backETFs. Last month, after celebrating its one-year anniversary, GraniteSharessaid its ETF (NYSE: BAR) has seen its assets under management surpass $350million.
The ETF offers the lowest cost investment product in the goldmarket with an expense ratio of 17.5 basis points.
However, not to be outdone, SPRD Gold Minishares, the newestlow-cost ETF (NYSE: GLDM), launched four months ago, saw its asset undermanagement hit $312 million last month.
The increased inflows came as equity markets sold off sharply inOctober, seeing their worst month since the financial crisis.
In a recent interview with Kitco News, Will Rhind, CEO ofGraniteShares, said that he is pleased with the growth he has seen in BAR inits first year. He added that in the current environment gold investors arepaying close attention to their fees.
While gold is an attractive defensive asset in the face of anequity market correction, Rhind said that the big threat investors need to payattention to is a surprise rise in inflation.
“The numbers at the moment aren’t the most exciting, they arestill the most positive backdrop inflation we have seen in more than 10 yearsand if that continues gold will benefit,” he said. “Higher inflation is the onerisk that investors haven’t prepared for in their portfolio.”
In an email statement to Kitco News, George Milling-Stanley, head ofgold investments at State Street Global Advisors and the marketing agent behindSPRD GLD products, said that the growth in low-cost ETFs is another sign thatthe gold market is in a healthy space.
“[The numbers] confirm our view that investors are once againturning to gold as a defensive asset, offering some protection against theunexpected, whether these tail risks are macroeconomic or geopolitical innature. This source of demand is coming in addition to the traditional reasonsfor allocating to gold such as diversification, liquidity, relatively lowvolatility, and the potential to improve risk-adjusted returns,” he said.“Surpassing $300 million in assets in just four months is a considerableachievement.”
The comments come as the World Gold Council said that goldholdings in global ETFs rose by 16.5 tonnes in October, the first monthlyinflows in four months.
SPRD Gold Shares, (NYSE: GLD) the world’s biggest gold-backedexchange traded product led the market with inflows of 11.9 tonnes last month.
“Global assets under management in gold-backed ETFsrose by 3.1%, on the back of global markets experiencing the worst Octobersince the 2008 financial crisis. North American and European funds benefitedfrom positive gold price performance, closing out the month with inflows of$561 million (1.2% increase in AUM) and $678 million (1.7% increase in AUM),respectively,” said Juan Carlos Artigas, director of investment research at theWorld Gold Council, in a press release.
By Neils ChristensenFor Kitco News
Follow neils_C
nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.  |