Investors have been yanking billions out of the most popular gold exchange traded funds, but one relatively new option has brought in a fresh cash infusion.
The SPDR Gold Shares (NYSEArca: GLD), the largest physically backed gold ETF play on the market, has experienced $1.2 billion in net outflows over the past month.
On the other hand, the GraniteShares Gold Trust (NYSEARCA: BAR), which debuted last August, recently attracted $130 million in net inflows and now holds $156.5 million in assets under management.
According to GraniteShares, the sudden interest in the smaller gold ETF may be attributed to costs. More and more large clients are taking money out of the largest and more popular gold ETFs, and some are looking into BAR due to its lower expense ratio. BAR has a 0.20% expense ratio, whereas GLD comes with a 0.40% annual fee.
Gold Under Pressure
Gold has been under pressure in recent weeks, despite the safe-haven status of the hard asset during periods of volatility. Dragging on precious metals, the USD has strengthened as the U.S. yields on benchmark 10-year Treasuries have pushed toward the 3% level. Rising yields typically hurt precious metals like gold since they do not offer a yield and a stronger dollar makes USD-denominated bullion pricier for foreign buyers.
Strong U.S. economic data may also push the Federal Reserve to accelerate interest rate hikes. U.S. service sector activity increased in May, pointing to strong economic growth over the second quarter, Reuters reports.