January 13, 2011

ETF Securities Debuts U.S. ETP Backed by Gold Bars Held in Asia

ETP's gold to be vaulted in Singapore by JPMorgan Chase

ETF Securities announced Thursday that its newest product, ETFS Physical Asian Gold Shares, will launch Friday on the NYSE Arca under the ticker AGOL. To be sold as shares in a U.S. precious metals trust, AGOL will be physically backed by gold bars vaulted in Singapore by JPMorgan Chase & Co.

According to ETF Securities officials, AGOL is the first precious metals exchange-traded product (ETP) to be vaulted in Asia. Singapore was chosen as the vault’s location because “like Switzerland, it’s widely considered a neutral country,” said Fred Jheon, ETF Securities Head of Product and Business Development, in a conference call on Thursday.

Global investor demand for gold vaulted outside of the United States, United Kingdom and Europe drove the decision to vault the gold in Asia, added William Rhind (left), New York-based strategic director of U.S. business development for ETF Securities USA, during the call.

“We’ve seen demand for AGOL from investors who want to diversify their traditional gold holdings into Asia,” Rhind said. “AGOL is more of a global product in that Asian investors are increasingly understanding the merits of ETP investing tools and the merits of gold. Crucially, the one part of the world that has been missing is Asia, and investors care very much where their gold is vaulted.”

The launch of AGOL will increase ETF Securities’ U.S. platform to seven exchange-traded funds (ETFs) that have achieved $3.5 billion in assets under management in 18 months.

AGOL shared are backed by London Bullion Market Association gold bars that meet “good delivery” standards.

Read how the precious metals market is rising as investors seek a safe haven at AdvisorOne.com.

Reprints Discuss this story
This is where the comments go.