Source’s physical gold ETC (SGLD) surpasses $3 billion in assets

Sep 10th, 2012 | By | Category: Commodities

Source, a leading Europe-based exchange-traded product (ETP) provider, has announced that its London-listed Source Physical Gold P-ETC (SGLD) has surpassed $3 billion in assets.

Source’s physical gold ETC (SGLD) surpasses $3 billion in assets

Source’s physical gold ETP, the Source Physical Gold P-ETC (SGLD), has surpassed $3 billion in assets.

As demand for precious metals has continued, investors have increasingly adopted physically-backed ETPs as their vehicle of choice. The Source Physical Gold P-ETC is now among the largest exchange-traded physical gold products globally.

In 2011, the Source Physical Gold P-ETC added over $1.2 billion in net new assets and traded over $4 billion on the London Stock Exchange (LSE). So far in 2012, the product has added over $587 million in net new assets and already traded over $4.2 billion on the LSE, ranking it in the top five ETPs traded on the LSE for the year.

Commenting on this new asset milestone, Stefan Garcia, head of commodity ETC sales at Source, said: “For some investors, gold has become a core holding in their portfolios with the percentage of exposure shifting with market dynamics. Physical ETCs are one of the more practical solutions for implementing that exposure.”

Physical ETPs, such as SGLD, combine the convenience and liquidity of an exchange-traded fund (ETF) with the reassurance of physical holdings. In SGLD’s case, the product is secured by physical bullion held in JP Morgan’s London vaults. Aside from owning gold bullion itself, which comes with a host of problems such as storage and security, physically-backed ETPs provide the most direct route into the metal.

The $3 billion milestone for SGLD has been reached less than eight weeks after Source announced that the product had surpassed the $2.5 billion mark. The growth of SGLD has boosted total assets under management at Source, which now stand at over $10 billion across its ETP range.

In addition to Source’s SGLD, which has an annual fee of 0.29% and is cross listed on Deutsche Börse (Xetra) and SIX Swiss Exchange, investors looking for gold exposure should also consider similar offerings from iShares, db X-trackers and ETF Securities (see below).

Indeed, despite its recent success in gathering assets, Source’s SGLD trails the ETFS Physical Gold ETC (PHAU) from ETF Securities, which has over $8 billion in assets and is one of the most liquid gold ETPs on the market.

iShares Physical Gold ETC (SGLN)
The iShares Physical Gold ETC is a physically-backed Exchange Traded Commodity (ETC) offering investors accessible, liquid and transparent exposure to the day-to-day movement of the price of gold, as per the London PM fix price. The security is backed by physical gold bullion held as allocated gold bars with the custodian, JPMorgan. London listed. TER 0.25%.

db Physical Gold ETC (XGLD)
The db Physical Gold ETC is backed by a direct investment in physical gold and provide investors with exposure to the gold spot price via London Good Delivery Gold Bars. The issuer (Deutsche Bank) has direct and sole ownership of the gold which is stored in secure vaults in London (JP Morgan and Deutsche Bank). Each physical ETC security entitles the holder to a specified quantity of gold of the segregated pool owned by the issuer. London and SIX Swiss listed. TER 0.29%.

ETFS Physical Gold ETC (PHAU)
The ETFS Physical Gold ETC is designed to offer investors a simple, cost-efficient and secure way to access the gold market by providing a return equivalent to movements in the gold spot price less the relevant management fees. PHAU is backed by physical allocated gold held by the custodian (HSBC). All physical gold metal held with HSBC conforms to the London Bullion Market Association’s (LBMA) rules for Good Delivery. London listed. TER 0.39%.

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