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Inflows into gold ETFs to continue into 2013, says Source

Inflows into European gold exchange-traded products have reached USD6.8bn year-to-date (15.4 per cent growth), bringing total assets to USD44.2bn in a year when the spot gold price has increased by nine per cent year to date in USD terms and ranged from USD1,540 to USD1,790/oz.

As demand for gold and other precious metals has continued to grow, investors have increasingly adopted physically-secured ETPs as their vehicle of choice.

The Source Physical Gold P-ETC has gathered the highest net new assets (NNA) of any European gold ETP year to date, accounting for 23 per cent of total gold NNA in Europe and remains the most traded gold ETP on the LSE. It is now among the largest exchange-traded physical gold products globally, with AUM in excess of USD4 bn2.
So far in 2012, the product has added over USD1.5bn in NNA and traded over USD6.5bn on the LSE, ranking it in the top two ETPs traded on the LSE for the year.

The Source Physical Gold P-ETC combines the convenience and liquidity of an ETP with physical investment in gold bullion. Each P-ETC is secured by physical metal held in J.P. Morgan’s London vaults. Source has seen inflows from a broad range of investors, including asset managers, pension funds and private banks from across Europe and the Middle East.

Stefan Garcia, head of commodity distribution at Source, says: “Amid the selection of European physical gold ETPs, 2012 saw investors voting with their money, favouring products with high liquidity, tight spreads and favourable fees. New asset flows into Source Physical Gold were split between new allocations and investors switching from more expensive alternatives into the Source product, a trend we believe is set to continue into 2013.”

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