The VanEck Merk Gold Trust (OUNZ) is one of the lesser known names in the gold ETF space, but it's about to compete with the big boys.
The company announced last week that it is cutting the expense ratio on OUNZ from 0.40% down to 0.25% in an attempt to capture the current precious metals rally.
For comparison's sake, the SPDR Gold Trust (GLD) charges 0.40% and the iShares Gold Trust (IAU) has a fee of 0.25%. GLD and IAU combined manage more than $100 billion in assets. OUNZ manages a comparatively meager $350 million.
Will the move work for VanEck? Possibly, but I wouldn't count on it.
GLD and IAU easily account for the vast majority of the gold ETF market. GLD, in particular, is frequently used as the trading vehicle of those seeking gold exposure and I don't suspect it's going to lose that title anytime soon. IAU may be less familiar to investors, but it's $25 billion asset base shows it's still a major player in the space.
But the ETF industry has become a fee-driven market. Many companies try to compete on price and it has proven to be an effective strategy in some, although not all, cases. BNY Mellon and SoFi, for example, recently launched funds with 0% expense ratios, but neither has managed to attract much in the way of assets.
More ETF Research
If you liked this article/video, please click the LIKE button or share it on Twitter, Facebook, etc. using the buttons below.
Feel free to leave any comments, questions, or thoughts on the ideas presented here (and sign-up if you haven't already).
Follow me and receive periodic notifications when I post here by clicking the FOLLOW button at the top of the page!