GraniteShares rolls out lowest-cost gold ETC

Sep 1st, 2017 | By | Category: Commodities

US-based ETF provider GraniteShares has launched the GraniteShares Gold Trust (NYSE Arca: BAR), a physically backed exchange-traded commodity which boasts the lowest expense ratio of all gold ETPs in the marketplace.

GraniteShares rolls out lowest-cost gold ETC

BAR costs just 0.20%, half the price of the $34.4bn SPDR Gold Shares (NYSE Arca: GLD)

BAR has been brought to market by Will Rhind, founder and CEO of GraniteShares. It costs just 0.20%, half the price of the $34.4bn SPDR Gold Shares (NYSE Arca: GLD), of which Rhind was formerly CEO.

“GraniteShares is giving investors the opportunity to own solid gold bars via the ETP at a price of 20 basis points,” Rhind said. “By offering BAR at 50 percent less than GLD, we’re looking to turn every suitable investor into a gold digger.”

GraniteShares is working with BNY Mellon, who will act as custodian for the fund, and gold bought by the fund will be stored in vaults owned by ICBC Standard Bank.

Gold ETCs have been strong performers recently, with investors turning to the safe haven asset due to rising global tensions and rising inflation. Physically-backed gold ETCs offer investors a more convenient way to gain exposure to movements in the gold price than actually buying bullion, with the added security of knowing the product is backed by gold bars in a vault compared to swap-based securities.

BAR is the third fund in the GraniteShares product suite, joining the GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (NYSE Arca: COMB) and the GraniteShares S&P GSCI Commodity Broad Strategy No K-1 ETF (NYSE Arca: COMG), both of which launched in May 2017.

COMB and COMG each provide access to a portfolio of futures contracts tracking a range of commodities. The ETFs are structured as 40 Act funds and do not issue K-1s.

Schedule K-1s are distributed to shareholders of traditional commodity-based ETFs, but the GraniteShares ETFs have avoided this by investing in a wholly-owned subsidiary based in the Cayman Islands which then invests in the underlying commodity futures. By doing so, investors in COMB and COMG will be taxed like a conventional mutual fund and will receive Form 1099 rather than the less favoured K-1s.

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