Invesco launches GBP-hedged version of USD11 billion Physical Gold ETC

Invesco has launched a GBP-hedged version of its USD11 billion Physical Gold ETF in response to increased demand.

Gold has been the most sought-after asset in Europe over the first six months of the year, with physical gold exchange-traded products gathering USD12.5 billion of net inflows, eclipsing the amount invested in any previous full year. Record demand for what is often perceived as a “safe haven” asset is being driven by several factors but particularly the uncertainty over the pandemic’s impact on the global economy. 

The ability of central banks to support their domestic economies through the crisis has resulted in differences in growth forecasts, interest rates and currency valuations. For example, the USD/GBP exchange rate in 2020 has ranged from a high of over 1.32 at the start of the year to a low of just under 1.15.
Currency fluctuations can have a material impact on investors. Quoted in US Dollars, the gold price has risen by 16.7% over the first six months of the year but is up by 23.7% over the same period when converted to Sterling.
Chris Mellor, Head of ETF Equity and Commodity Product Management at Invesco, says: “Many investors this year have told us they want exposure to the gold price but not the currency risk attached to a US dollar asset. We are now able to offer these investors currency-hedged versions of the Invesco Physical Gold ETC, our largest exchange-traded product in Europe.”