Source anticipates gold ETP inflows to continue into 2013

Dec 17th, 2012 | By | Category: Commodities

Inflows into European gold exchange-traded products (ETPs) have reached $6.8 billion year to date (15.4% growth), bringing total assets to $44.2 billion in a year when the spot gold price has increased by 9% year to date in US dollar terms and ranged from $1,540 to $1,790/oz.

Source anticipates gold ETP inflows to continue into 2013

Source anticipates gold ETP inflows to continue into 2013.

As demand for gold and other precious metals has continued to grow, investors have increasingly adopted physically-secured ETPs as their vehicle of choice.

One such product, the Source Physical Gold P-ETC (SGLD), has gathered $1.5 billion in net new assets (NNA) so far in 2012, the highest of any European gold ETP year to date.

The Source product is the most traded gold ETP on the London Stock Exchange, and is among the largest exchange-traded physical gold products globally, with assets under management in excess of $4 billion.

The top spots go to SSgA’s SPDR Gold Trust ETF (GLD) and ETF SecuritiesETFS Physical Gold (PHAU) and Gold Bullion Securities (GBS).

Source has seen inflows from a broad range of investors, including asset managers, pension funds and private banks from across Europe and the Middle East, suggesting continued diversification and deepening of the investor base using ETPs to gain gold exposure.

Commenting on continued investor interest in bullion, Stefan Garcia, head of commodity distribution at Source, said: “Amid the selection of European physical gold ETPs, 2012 saw investors voting with their money, favouring products with high liquidity, tight spreads and favourable fees. New asset flows into Source Physical Gold were split between new allocations and investors switching from more expensive alternatives into the Source product, a trend we believe is set to continue into 2013.”

London-listed physical gold ETPs:

Source Physical Gold P-ETC (SGLD)
The Source Physical Gold P-ETC provides physically-backed exposure to the performance of the London Gold Market PM Fixing Price in USD. Each Gold P-ETC is a certificate which is secured by gold bullion held in JP Morgan Chase Bank’s London vaults. London 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%.

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%.

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