How can a EU resident own physical gold? [through an ETF]

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ertyu
Posts: 3
Joined: Tue Oct 15, 2019 3:35 am

How can a EU resident own physical gold? [through an ETF]

Post by ertyu » Tue Oct 15, 2019 3:43 am

I am looking for an ETF as a means to add gold to my portfolio. However, it seems that as a EU investor, all I can find are ETCs. An ETC does not confer ownership of the underlying asset, rather, an underwriter backs it to track the commodity price. Smells awfully fishy to me in case everyone decides to exit at the same time for one reason or another, or in case the underwriter goes out of business (we know well enough by now that just because a bank or financial institution is reputable and established, that does not mean it will not go bankrupt)

Does anyone know of a ticker which I am allowed to own as a EU resident that actually confers ownership to an underlying actual physical gold?

Many thanks

TedSwippet
Posts: 2501
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: How can a EU resident own physical gold? [through an ETF]

Post by TedSwippet » Tue Oct 15, 2019 5:55 am

ertyu wrote:
Tue Oct 15, 2019 3:43 am
Does anyone know of a ticker which I am allowed to own as a EU resident that actually confers ownership to an underlying actual physical gold?
Even though its legal structure is listed as 'ETC', would WisdomTree Physical Gold (PHAU) do?
WisdomTree Physical Gold is designed to offer security holders a simple and cost-efficient way to access the gold market by providing a return equivalent to the movements in the gold spot price less the applicable management fee.

WisdomTree Physical Gold is backed by physical allocated gold held by HSBC Bank plc (the custodian). Only metal that conforms with the London Bullion Market Association's (LBMA) rules for Good Delivery can be accepted by the custodian. Each physical bar is segregated, individually identified and allocated.

tre3sori
Posts: 20
Joined: Wed Jul 24, 2019 3:13 am

Re: How can a EU resident own physical gold? [through an ETF]

Post by tre3sori » Tue Oct 15, 2019 8:14 am

UCITS regulation of ETFs in the EU requires that ETFs hold baskets of securities, not single assets. ETFs cannot hold gold only. Certificates are a workaround. Some of them are backed with physical gold but introduce counterparty risk. Investors don't seem to be very concerned with that risk: Xetra-Gold has AUM of over 8.5 billion € and is backed by 196 tons of (hopefully real) physical gold.

Valuethinker
Posts: 38983
Joined: Fri May 11, 2007 11:07 am

Re: How can a EU resident own physical gold? [through an ETF]

Post by Valuethinker » Wed Oct 16, 2019 11:03 am

ertyu wrote:
Tue Oct 15, 2019 3:43 am
I am looking for an ETF as a means to add gold to my portfolio. However, it seems that as a EU investor, all I can find are ETCs. An ETC does not confer ownership of the underlying asset, rather, an underwriter backs it to track the commodity price. Smells awfully fishy to me in case everyone decides to exit at the same time for one reason or another, or in case the underwriter goes out of business (we know well enough by now that just because a bank or financial institution is reputable and established, that does not mean it will not go bankrupt)

Does anyone know of a ticker which I am allowed to own as a EU resident that actually confers ownership to an underlying actual physical gold?

Many thanks
Is there not a London listed investment trust?

bgreat
Posts: 104
Joined: Tue Jun 25, 2019 11:48 pm

Re: How can a EU resident own physical gold? [through an ETF]

Post by bgreat » Wed Oct 16, 2019 1:22 pm

ertyu wrote:
Tue Oct 15, 2019 3:43 am
I am looking for an ETF as a means to add gold to my portfolio. However, it seems that as a EU investor, all I can find are ETCs. An ETC does not confer ownership of the underlying asset, rather, an underwriter backs it to track the commodity price. Smells awfully fishy to me in case everyone decides to exit at the same time for one reason or another, or in case the underwriter goes out of business (we know well enough by now that just because a bank or financial institution is reputable and established, that does not mean it will not go bankrupt)

Does anyone know of a ticker which I am allowed to own as a EU resident that actually confers ownership to an underlying actual physical gold?

Many thanks
Are you able to buy something like SGOL? I know that US ETF's generally can't be bought by EU residents, but SGOL is somewhat different from what understand (and owns its gold directly from what I can tell), hence maybe isn't subject to PRIIPS?

Next place to look is perhaps Swiss-domiciled ETF's which aren't UCITS (hence no ETC issue), but still issue KIID's (hence should be purchasable by EU residents). One example is UBS ETF (CH) Gold (CH0106027193), which appears to own physical gold directly. I haven't done detailed research on this either, but might be something to look into.

Other idea is to buy directly via someone like Bullionvault. They seem reputable enough, and I'm personally considering using them, but haven't finished my due diligence/research yet either.

silverex
Posts: 86
Joined: Sun Jan 07, 2018 1:05 pm
Location: Vilnius, Lithuania

Re: How can a EU resident own physical gold? [through an ETF]

Post by silverex » Thu Oct 17, 2019 8:00 am

Look into ZKB Gold ETF. It's issued by Zuercher Kantonalbank, and, citing factsheet, "Investors are able to sell their units at any time or request pay-ment in physical gold in standard bars at a rate of 12.5 kilo-grams per unit."
It's not EU (UCITS) ETF though.

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Stef
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Re: How can a EU resident own physical gold? [through an ETF]

Post by Stef » Thu Oct 17, 2019 10:35 am

12.5kg per unit?

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