Amundi Physical Gold ETC (LON:GLDA) is experiencing an upsurge in demand from investors as it aims to build popularity as “Europe’s lowest cost ETC”.
Set up last year and recently listed on the London Stock Exchange, Amundi’s head of ETF, Indexing & Smart Beta Development for the UK and Ireland, Ashley Fagan, told Proactive that one of the key differentiators of the ETC, besides its low cost, is that responsible investing is “one of the four founding pillars” of the firm and as such it is aiming to “offer something that exclusively holds responsibly sourced gold”.
Fagan said that this ethos forms a core part of Amundi’s DNA, with the company having been one of the founding signatories to the United Nations Principles of Responsible Investing in 2006.
“We are quite a pioneer in this area”, Fagan said, adding that in the last 12 to 18 months there has been a significant uptick of interest in responsible investing in the UK market.
“Almost every conversation we have now has some element of responsible investing incorporated into an investment solution”, she said.
In the year to date and with the onset of the coronavirus pandemic, Fagan said gold’s status as a haven asset is coming into play amid volatility in the wider market, with over £10bn flowing into Europe-based Gold ETCs.
She added that environmental, social, and governance (ESG) investments are also seeing significant demand as the conversation shifts from purely doing good to responsible assets that also provide good returns for investors.
In terms of Amundi’s target market, while there are a number of legacy products, Fagan said the ETC’s focus on responsible sourcing of gold is one area that differentiates it from its competitors, as well as a “very robust structure” in which the ETC is 100% backed by physical gold that is fully allocated at all times in a secure vault at HSBC, one of the largest gold vaults in London.
“From the moment an investor buys the ETC until they sell it, there are physical gold bars 100% allocated and backing that”, Fagan said.
In terms of performance, she said the aforementioned demand for haven assets has boosted the ETC, which over the last six months has risen by 17% in value.
Fagan also said that this increased demand “hasn’t subsided”, with all investors able to take advantage of Amundi’s momentum including asset and wealth managers.
The Amundi Physical Gold ETC was trading at around 5,375p on Thursday morning.