Looking to increase your exposure to gold? The precious metal has had an up and down time of it in the market over the last two years as the Fed has raised rates to fight inflation and drain liquidity. Gold still presents a safe haven option with inflation still a big issue and the Fed considering as many as three rate hikes this year, and for those investors who want responsibly sourced gold, the Franklin Responsibly Sourced Gold ETF (FGLD) should be on the shortlist.
FGLD holds physical gold bars at JP Morgan Chase bank’s London branch, with each share representing 1/100th of the spot price for gold. To be eligible for inclusion by the custodian, the bars have to meet the London Bullion Market Association’s (LBMA) responsible sourcing program for gold, in which refiners have to demonstrate efforts to respect the environment and combat issues like terrorist financing and money laundering.
“A lot goes into how investors should be thinking about constructing portfolios and gold is almost a separate consideration as an asset class,” Franklin Templeton’s head of ETF product and capital markets David Mann said, whether as a diversification against equities or for certain scenarios for inflation in the U.S.
“We think that we’ve brought a very nice product to market, that it gives exposure to physical gold, it does it in a responsible manner, and we’ve priced it very aggressively, as well,” Mann added.
FGLD launched last June and has already exceeded $100 million in AUM, outperforming both its ETF Database Category Average and its Factset Segment Average on a three-month basis, beating the averages by 180 basis points and 68 basis points respectively.
Gold has picked up investors’ interest over the last few months thanks to its status as a safe haven and a place to store value. For those investors who are interested in the metal while waiting for markets to figure themselves out, but want to make sure for themselves or their clients that the gold is ethically acquired, a responsibly sourced gold ETF like FGLD could be an appealing option.
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