ETF Securities, the European-based ETF issuer famous for its lineup of physically-backed precious metal ETFs, announced further expansion of its product offering with the launch of an ETF that holds physical gold bullion in Singapore, the ETFS Physical Asian Gold Shares Trust. The new fund will trade under the symbol AGOL and will charge investors a competitive 39 basis points for its storage fees. The new product marks the fifth fund tracking the physically-backed gold market, competing with the likes of GLD, IAU, PHYS, and ETF Securities’ own SGOL in the much sought after bullion ETP market.
This product will mark the first time that U.S. investors are able to invest in a product that stores gold outside of the U.S. or Europe, allowing for further diversification across geographic regions. “We are pleased to introduce the first physically backed Asian Gold ETP in the US. AGOL offers investors a new alternative to invest in the gold market and diversify their physical gold holdings into Singapore. The launch of AGOL further broadens ETF Securities product lineup and demonstrates our commitment to developing innovative precious metal ETPs.” [also read Beyond GLD: Three Alternative Precious Metal ETFs]
Much like the rest of ETFS funds, AGOL will also incorporate a variety of programs in order to give investors piece of mind regarding their gold holdings. ETFS Physical Asian Gold Shares are backed by London Bullion Market Association (LBMA) gold bars that meet “good delivery” standards. These bars underlying AGOL will be audited bi-annually by an independent third part auditor and all gold bar numbers will be published daily at ETF Securities’ website.
Appeal Of Singapore
For investors who are growing increasingly concerned about the debt issues in the Western world, gold storage in the Asia-Pacific region is becoming an increasingly attractive option. However, many Asian nations cannot match the level of security and stability that is present in the Swiss market which has forced many to postpone an Asian gold storage plan until now. Singapore, considered by many to be the ‘Gateway To Asia’ is an extremely developed market that has become world famous for its rigid rules, transparent markets, and political stability, making it a choice location for concerned investors to store their gold. According to a recent competitiveness report, the country ranks in the top five for property rights, strength of auditing as well as strength of investor protections, suggesting that the nation is a very safe place for investors to hold wealth for the long-term [read Can Anything Stop The Singapore ETF?].
AGOL marks the seventh product for ETF Securities which has seen incredible levels of success from most of its funds. SGOL, the company’s product that tracks gold stored in secure Swiss vaults, has amassed more than $1.1 billion in assets while its palladium and platinum funds– PALL and PPLT- have each garnered more than $800 million. Should the company be able to attract the same level of attention for its Asian Gold Fund that it has for its original SGOL, look for ETF Securities to have yet another winner on their hands in the physically-backed ETF market [see ETFS Roll Out Physical Precious Metals Basket ETF].
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Disclosure: Eric is long gold and IAU.