ETF Securities has seen total assets under management in its physical gold exchange-traded commodities grow in the past year to USD4.8bn, up USD1.75bn.
ETF Securities has seen total assets under management in its physical gold exchange-traded commodities grow in the past year to USD4.8bn, up USD1.75bn.
The 55 per cent increase in assets is due to gold’s dominant position as a liquid safe haven asset while not being subject to credit risk.
In addition, ETF Securities says gold’s low to negative correlation with equities helped it to dominate 2008 performance tables, with a four per cent increase in USD and 44 per cent increase in GBP.
ETFS Physical Gold grew by USD1.2bn and Gold Bullion Securities grew by USD550m during 2008.
The 55 per cent increase in physical gold ETC assets compares to a five per cent fall in overall European ETF assets in 2008.
Both physical gold ETCs, ETFS Physical Gold and Gold Bullion Securities are also in the top three ETFs/ETCs traded on the London Stock Exchange.
Combined, they traded USD14.5bn in 2008 across five European exchanges, trading an average of USD58m per day. This was up 230 per cent from 2007 when they traded USD4.3bn.
Globally, physical gold ETCs have now accumulated USD30bn in assets and trade up to USD1bn per day.
ETF Securities says that in today’s world where investors are worried about credit risk, interest rates are extremely low, and governments are reflating and building up debt aggressively, gold is proving to be a popular investment.
Nik Bienkowski, chief operating officer at ETF Securities, says: “In the last two months of 2008 and continuing this year, investors are seeking assets which are liquid, secure and transparent. Alternative investments should help to protect portfolios due to the their low correlation with equities and bonds, however bans on redemptions and other well published issues have tarnished many alternative investments such as hedge funds and real estate. ETCs solve these issues.”
