A New ETF to Play Gold's Appeal

As the appeal for commodities—in particular gold—continues to rise, ETF Securities recently announced another first-to-market ETF, the ETFS Physical Asian Gold Shares (AGOL). It's the first U.S. precious metals product to be vaulted in Asia. Its custody will store all of its physical gold bars in secure London Bullion Market Association approved vaults in Singapore, as stated in its prospectus. From an investment perspective, the objective of AGOL is to reflect the price performance of physical gold, less trust expenses, while carrying an expense ratio of 0.39%.

The launch of AGOL couldn’t come at a better time. Demand for gold and investment vehicles that enable one to gain access to gold continues to rise. The precious metal's safe haven characteristics during times of uncertainty, its ability to give investors the capability to hedge against inflation and its uses as a method to diversify assets are likely to keep it a "hot commodity." Furthermore, as demand for gold continues to rise, from a consumer, investor and governmental standpoint, imbalances in supply and demand could further push up prices, since production and extraction of the metal is not easy.

ETF Securities is no stranger to the physically backed precious metal ETF space. The provider’s ETFS Physical Swiss Gold Shares (SGOL), ETFS Silver Shares (SIVR), ETFS Physical Palladium Shares (PALL), ETFS Physical Platinum Shares (PPLT), ETFS Precious Metals Basket Shares (GLTR) and ETFS Physical White Metal Basket Shares (WITE) have enabled the provider to surpass $3.5 billion in U.S. assets under management in a relatively short time span.