London-based ETF Securities, the European ETF giant that has made a splash in the U.S. industry, announced on Wednesday that it has topped $350 million in assets, a remarkable accomplishment considering ETFS launched its first U.S. listed ETF in July of this year. That inaugural fund, the ETFS Silver Trust (SIVR) now has about $150 million in assets, while the ETFS Physical Swiss Gold Shares (SGOL) has topped the $200 million mark.
Demand for precious metals have surged this year – ETFS cited increased government debt levels, aggressive quantitative easing policies, concerns about the outlook of major world currencies, and inflation worries as major drivers for cash flows into safe haven investments like gold and silver.
The success of SGOL is particularly impressive. Launched in September, the gold ETF is already the fourth largest precious metals ETF, behind GLD, SLV, and IAU. Like GLD, SGOL physically holds gold bullion (as opposed to relying on futures contracts to track the price of gold). But SGOL distinguishes itself in a few key ways. First, its gold is stored in secure vaults in Switzerland, offering valuable geographic diversification (as well as diversification across custodian) for investors with significant gold holdings. For more information on the differences between various precious metals funds, see this complete guide to gold ETFs.
No doubt encouraged by these fast starts, ETFS is planning to expand its line of exchange-traded commodities. The company recently filed a prospectus for a physically-backed palladium fund, which would be a first for the U.S. market.
Disclosure: No positions at time of writing.