Jake Coulson, investment writer at HANetf, shed light on HANetf's unique partnership with The Royal Mint, which has brought a new dimension of sustainability to the gold exchange-traded commodity (ETC) market.
The partnership led to the 2020 launch of the Royal Mint Responsibly Sourced Physical Gold ETC, a product specifically designed to meet the needs of investors who prioritise both physical security and environmental responsibility.
Coulson detailed the advantages of this product, emphasising how it aligns with sustainability goals through the inclusion of 100% recycled gold, which significantly reduces the carbon footprint compared to traditional mined gold.
This conversation underscores how HANetf and The Royal Mint are catering to the growing demand for sustainable and transparent investment options in precious metals.
Proactive: Hello, you’re watching Proactive. I'm joined by Jake Coulson, investment writer at HANetf. Jake, great to have you in the studio. Could you tell us a little bit about the first gold product you launched with the Royal Mint?
Coulson: Yeah, absolutely. So back in 2020, we partnered with The Royal Mint to launch a Gold ETC with them. And it was a pretty significant milestone because it marked the first time that a gold ETC had been launched with a European sovereign mint. The ETC itself, called the Royal Mint Responsibly Sourced Physical Gold ETC, tracks the price of gold, but quite crucially, it’s fully allocated.
Proactive: And what does it mean that the ETC is fully allocated?
Coulson: It means it’s 100% physically backed by gold bars that are custodied by the mint at the highly secure, purpose-built vault in Llantrisant, Wales. That’s important for a few reasons. First, it means all of the gold is stored outside of the London banking systems, which can offer real diversification for those who want that in their gold custody arrangements. Second, The Royal Mint has very close control over their supply. All the gold bars in the ETC are London Bullion Market Association post-2019, responsibly sourced good delivery bars, with a growing number of post-2022 bars in there too. Because of this physical backing, investors in the ETC also have the option to physically redeem the gold in the product for gold bars from the mint or coins like the Royal Mint Britannia and Sovereign range.
Proactive: The Royal Mint is seen as a prestigious institution in the UK. What are the benefits of having them as a partner on the product?
Coulson: There are many benefits. They’re one of the oldest companies in the world, dating back to around 886 AD during the reign of Alfred the Great. They bring a great deal of experience and trust. The Royal Mint is wholly owned by His Majesty’s Treasury, so it’s very much a part of the British institution. We also gain unique advantages, like the close control over their supply chain that I mentioned earlier. For example, in 2022, after Russia invaded Ukraine, they removed all Russian-origin bars from the ETC immediately, which I think is reassuring for investors concerned about such issues.
Proactive: I understand that recycled gold bars are also part of the ETC now. Can you tell us why that’s important?
Coulson: Yes, that’s a relatively new feature, and currently, over half of the bars backing the product are 100% recycled gold. Recycled gold is an alternative to mined gold, which has a significant environmental impact. Mining gold requires shifting vast amounts of earth, which affects landscapes and local ecosystems. And as gold grades worsen each year, more earth must be dug up to get the same amount of gold, so this issue will only get worse. Mining is also energy-intensive. In comparison, recycled gold is believed to be around 90% less carbon-intensive than mined gold. For investors who prioritize sustainability, this makes the ETC quite a compelling option.
Proactive: Recently, you launched three additional gold products with The Royal Mint. Could you tell us more about those?
Coulson: The most recent additions to our range with The Royal Mint are three currency-hedged versions of the ETC, available in pound sterling, euro, and Swiss franc. These allow investors to cancel out U.S. dollar exposure while retaining all the benefits of the original Royal Mint ETC, including the LBMA-certified gold bars. All bars are audited bi-annually, and a full bar list is always available on our website if investors want to see exactly which bars they have exposure to.