World's largest gold ETF is getting a cheaper little brother
NEW YORK – The price of gold is falling, at least for investors in exchange-traded funds.
The World Gold Council is readying a new fund that will charge less than any other gold ETF, regulatory filings show. It will vie for assets with 35 other precious-metals exchange-traded products in the US, including SPDR Gold Shares – known by its ticker GLD – the $35-billion market leader, which the council also started.
Despite gold’s recent slump amid higher interest rates, enthusiasm for the commodity as both a trading instrument and a store of value has been strong this year. Trading in GLD soared during February’s volatility as investors sought to bet on, or hedge against, markets heading south. A rival fund from BlackRock, meanwhile, took in more than $700-million in both January and April, the most for any month in two years, Bloomberg data show.
The gold spot price has risen less than 0.1% this year. The metal was trading at $1 304.47/oz as of 9:25 a.m. in New York.
Investors will soon be able to get a piece of that action for a lower price. The SPDR Gold MiniShares Trust, which will trade as GLDM, will cost just 18 basis points in management fees, or $1.80 for every $1 000 invested, the filings show. By comparison, GLD charges $4 for every $1 000 invested.
The fund will also start trading with a significantly lower share price than GLD, allowing investors to buy in smaller increments, the documents show.
GLDM’s shares will start trading at around $12.98, the filings suggest, versus about $123 for the older fund. That would put GLDM on a par with BlackRock’s iShares Gold Trust, which trades at $12.47 a share. However, it charges $2.50 for every $1 000 invested.
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