ETF Securities, the popular physically-backed metal exchange traded fund (ETF) provider, has pulled the lid off its newest offering: a physically-backed gold ETF that domiciles the yellow metal in Singapore.
Will Rhind, head of U.S. operations for ETFS, says that the goal of ETFS Asian Gold Shares (NYSEArca: AGOL) is to further diversify gold holdings into the Asian region and outside of the traditional gold vaulting stations in North America and Europe.
“Some investors are looking for another option outside of Europe and the United States. AGOL provides that option,” Rhind says. JP Morgan will be the custodian and it will charge an expense ratio of 0.39%.
ETFS Physical Swiss Gold (NYSEArca: SGOL) holds its gold in Swiss vaults, while iShares COMEX Gold (NYSEArca: IAU) holds its gold in Toronto, New York and London and SPDR Gold Shares (NYSEArca: GLD) holds its gold in London. [The Physically-Backed Gold ETFs Go Head-to-Head.]
In addition to giving U.S. investors another way to diversify their gold holdings, the ETF was also created to meet demand the provider noticed in Asia.
“Asian investors are recognizing the importance of gold and the merits of ETPs [exchange traded products],” Rhind says. “Those are the two main demand drivers we’ve seen, which has really prompted us to take action on this product.”
Responding to questions about whether the addition of another physically-backed gold product would dilute the gold ETF space, Rhind says he doesn’t believe so because it fills a gap.
“Crucially, the one major part of the world missing is Asia. Now the way to access Asian gold is highly complementary to the existing suite in the U.S. market.”