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Franklin Templeton launches responsible gold ETF

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(Kitco News) - Another player has entered the gold market as Franklin Templeton launches a new gold-backed ETF that also looks to improve a portfolio's ESG rating.

Thursday, the international investment firm launched its Franklin Responsibly Sourced Gold ETF (NYSEArca: FGLD). According to the company's press release, the fund will hold gold refined in accordance with London Bullion Market Association's Good Delivery List.

The LBMA's Responsible Gold Guidance establishes minimum mandatory requirements along the entire gold supply chain of the refined precious metal. Gold and silver on the Good Delivery List have been mined through verified supply chains that meet internationally recognized ethical standards.

"We are excited to offer Franklin Responsibly Sourced Gold ETF (FGLD) as one of the most cost-effective gold ETFs in the market. We believe it's a fantastic option for investors looking to add gold investments to their portfolios, offering a compelling way to participate in the physical gold market, with the added peace of mind of knowing that this gold is responsibly sourced," said David Mann, Head of Global Exchange-Traded Funds (ETFs) Capital Markets in a statement.

Todd Mathias, Head of U.S. ETF Product Strategy, added that Franklin Templeton is excited to bring an ESG-focused ETF into this asset class.

Not only will the new ETF highlight the growing importance of EGS in the precious metals sector, but it is also one of the lowest-cost funds in the marketplace, with a management fee of 15 basis points.

FGLD joins Franklin's ETF platform, which has over $12 billion in assets under management as of May 31, 2022.

Franklin Templeton has been bullish on gold most of the year as markets have been rocked by geopolitical uncertainty and volatility.

Equity markets have seen their worst half-year performance since the 1970s. Markets have struggled as rising inflation pressures have driven recession fears among investors. The S&P 500 is ending the first half of the year down nearly 21%. Meanwhile, gold prices are roughly unchanged year-to-date.

In an interview with Kitco in May, Steve Land, Vice President and Portfolio Manager of Franklin Templeton's Franklin Gold and Precious Metals Fund, said gold was a good place to hide as market volatility rises.

Land added that rising inflation will continue to make gold an attractive investment.

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