This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

New Gold ETF Set for Launch on NYSE

NEW YORK (TheStreet) -- ETF Securities is adding one more gold ETF into the mix, but this time the gold is stored in Singapore.

ETFS Physical Asian Gold Shares is slated to debut on the New York Stock Exchange (NYSE) this Friday under the ticker symbol "AGOL" and ETF Securities is hoping that the lure of gold stored in Asia will help jumpstart investor demand.

The gold will be held by JPMorgan Chase (JPM) in a recently purchased vault in Singapore under the London Bullion Market Association's rules for Good Delivery.

The impetus for the ETF, says Will Rhind head of U.S. operations for the company, was new investors not wanting gold that was stored in London ( SPDR Gold Shares (GLD); iShares Gold Trust (IAU)), the U.S. (IAU) or Switzerland ( ETFS Physical Gold (SGOL)).

ETF Securities launched SGOL in September 2009 and currently has $1.13 billion in assets and holds 820,739.304 ounces of gold. These physically backed exchange traded products aren't like closed-end funds, they only buy gold if demand rises and they need to issue more shares. Roughly for every share you own, you own one-tenth of an ounce of gold, but this ratio deteriorates over time as the issuer must sell shares to pay for daily expenses.

Both gold ETFs will be audited bi-annually by an independent third party and all gold bar numbers are published daily on their website.

I asked Rhind on the conference call if two gold ETFs would be dilutive, basically are they overdoing it? Rhind maintains that storing gold in Asia would be "highly complementary" to its Swiss based ETF.

"Investors may also have reached particular internal holding limits and need other gold options that are not Europe or the U.S.," says Rhind. According to the company, Asian investors have also expressed interest in gold ETFs where the gold is stored locally.

It will be hard to guess how much demand will come from Asia but the region's thirst for gold and gold products has been on the rise, especially on any gold price correction. China alone imported 209.7 metric tons in the first 10 months of 2010, or 7.4 million ounces, and the country has been promoting gold investing and buying by offering different gold funds and giving investors access to overseas products.

Gold ETFs are not typically redeemed for the physical metal, however, as investors must redeem in whole lots, sometimes as much as 50,000 shares, or $6.8 million. Although you don't get to touch the metal, you are taxed like you do. Profits are subject to a 28% collectables fee.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GLD $115.06 0.00%
GLTR $62.11 0.00%
IAU $11.60 0.00%
PALL $71.80 0.00%
PPLT $110.43 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs