An investment in physical gold requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing and insurance of the metal. Although the Shares are not the exact equivalent of an investment in gold, they provide investors with an alternative that allows a level of participation in the gold market through the securities market.
SGOL holds allocated physical gold bullion bars stored in secure vaults–a differentiating factor, however, is that the gold itself is stored in Zurich, Switzerland.
“The one primary difference is that we custody our gold in Switzerland,” said Stan Kiang, Director of Strategic Accounts at Aberdeen Standard Investments. “For your true gold bug, they value the stricter banking laws and privacy laws that Switzerland offers.”
“No government can take over an account in Switzerland. For your true gold bug, for your true doomsday scenario, they can appreciate that type of protection,” Kiang added.
Cost-Effectiveness
In addition, Aberdeen Standard Investments recently reduced its sponsor fee for SGOL to 0.17 percent from 0.39 percent. With roughly $800 million in assets under management, it makes SGOL not just one of the lowest, but the lowest cost fund relative to its competitors.
“We have now priced that product at 17 basis points, which is the lowest cost in the marketplace right now” said Kiang.
Investors are not only getting a cost-effective physical gold strategy with the unique Switzerland storage component built into the fund, but also one that boasts a long track record that dates back to 2009.
“It’s a pretty compelling offering for anyone that’s looking for gold exposure,” Kiang said.
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