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Competition In Gold ETFs Heating Up As BAR Sees $145M Growth In Three Days

Kitco News

(Kitco News) - Competition in the gold space is heating up as the newest exchange-traded product saw inflows of $145 million in less than a week.

Last Friday GraniteShares Gold Trust (NYSE: BAR) gold holdings were valued at $15 million, explained Will Rhind, CEO of the ETF firm, in an interview with Kitco News. By Monday, he said that BAR’s assets under management increased by $145 million, totaling $160 million.

In the same time frame, SPDR Gold Shares (NYSE: GLD) the world’s biggest gold-backed ETF saw its assets under management fall by $713 million as the fund saw outflows of 341,118 ounces held in trust. Currently, GLD holds 836.13 tonnes of gold in trust, valued at more than $34.7 billion.

While BAR still has a way to go to catch up to GLD, Rhind said that investors are starting to see the value in his ETF, which was launched August 2017. He added that the ETF’s value goes beyond just having the lowest management fees at 20 basis points in the marketplace. In comparison, GLD has an administration fee of 40 basis points and Blackrock’s iShares Gold Trust has fees of 25 basis points.

“When I set out to create BAR I wanted to establish a new benchmark for gold investing,” he said. “It’s not just about the fee but a new standard for gold investing. As a new benchmark, BAR is just getting started.”

As the previous CEO of GLD, Rhind said that he was able to learn a lot about what is essential to gold investors that he was able to bring to BAR. He explained unlike GLD, BAR’s shares are backed 100% by physical metal held in just in LBMA vaults.

“We don’t lend out gold and don’t allow cash or futures in the fund, everything is backed by physical gold and is audited twice a year,” he said. “These are important features among gold investors.”

Rhind added that the price of gold could also be prompting investors to find more low-cost opportunities to maximize potential gains. He said that he has heard from a lot of fund managers that with gold hovering around $1,300 an ounce, they are cutting their losses in GLD and reinvest at a lower level and reinvesting funds into BAR to reduce costs.

“If you can half your cost going from one gold ETF to another and maintain the same exposure why would you not do that,” he said.

Looking ahead, Rhind said that he expects BAR to continue to attract attention from all levels of investors, as the market’s potential continues to grow.

“The biggest challenge right now for the gold market is the robustness of the U.S. economy, but that is starting to change as we see volatility enter the marketplace,” he said. “I see three potential catalysts that can drive gold prices higher: a stock market correction, a sustained spike in volatility and a surprise shock in inflation. I don’t think a stock market correction is very likely, so I am paying attention to the other two factors.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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