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Gold ETFs Still Bleeding Cash


We have seen heavy activity in terms of fund flows that has persisted in Gold related ETFs, particularly GLD (SPDR Gold, Expense Ratio 0.40%) which remains the largest fund in the category in terms of assets under management $38.2 billion.

Gold prices have unquestionably bounced sharply off of their late June intraday lows, (reference price intraday low of $114.68 in GLD compared to current levels $121.13) but the steady asset outflows in GLD have continued.

The fund has shed another $1 billion in terms of redemption flows in recent trading sessions, bringing the year to date total to a massive $19.36 billion in terms of net outflows.

Related fund, IAU (iShares Gold, Expense Ratio, 0.25%), which has a considerably smaller asset base ($7.1 billion) has seen $1.72 billion leave the fund during this same time period.

The physical Gold ETF space, despite the recent trend of assets flowing out, is still very large in terms of its collective asset size with a third fund SGOL (ETFS Physical Swiss Gold Shares, Expense Ratio 0.39%) amassing $1.19 billion in AUM since its September of 2009 launch.

There are now twenty three non-leveraged ETPs that fall within the “Precious Metals” category including not only gold backed or gold focused ETPs, but also other metals such as Silver, Platinum, and Palladium for example, and although the accumulation of assets in the space is rather top heavy at the moment (with the top five funds holding the lion’s share of the overall assets invested in the space).

Two of these “top five” funds, PPLT (ETFS Physical Platinum Shares, Expense Ratio 0.60%) and PALL (ETFS Physical Palladium Shares, Expense Ratio 0.60%) only debuted in 2010, and have exhibited impressive asset growth since inception, demonstrating the appetite for exposure to physical precious metals within one’s ETF portfolio.

Other, lower tier Precious Metals focused ETPs still languish in relative obscurity, such as RGRP (RBS Rogers Enhanced Precious Metals ETN, Expense Ratio 0.95%) and BLNG (iPath Pure Beta Precious Metals, Expense Ratio 0.75%) but even specialty and somewhat esoteric ETPs in the space, such as WITE (ETFS Physical White Metal Basket Shares, Expense Ratio 0.60%), TBAR (RBS Gold Trendpilot ETN, Expense Ratio 1.00%), AGOL (ETFS Physical Asian Gold Shares, Expense Ratio 0.39%), and GLTR (ETFS Physical Precious Metal Basket Shares, Expense Ratio 0.60%) have collectively demonstrated the ability to raise assets over time and gradually garner investor attention.

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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