Interest fee

SSGA Reduces Fees on Gold ETF ‘MiniShares’ to Just 0.10% | ETF Strategy


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State Street Global Advisors cut the expense ratio for $4.7 billion SPDR Gold MiniShares Trust (GLDM US) from 0.18% to just 0.10%.

GLDM is now the cheapest gold ETP in the US in terms of referral fees.

Following the price drop, GLDM is now the physically cheapest gold exchange-traded product in the United States in terms of referral fees.

The move comes at a good time, amid renewed interest in safe havens due to the escalating Russian-Ukrainian war.

Since Putin ordered his armed forces into Ukraine on February 24, the price of gold has gained 2.3% to $1,954 an ounce. US Treasuries also rallied, with the yield on 10-year bonds rising from 1.97% to 1.71% over the same period. Data as of March 4.

Although gold has been trending higher over the past week, the yellow metal’s volatility has notably increased. This indicates that the market may find it difficult to assess the long-term consequences of the ongoing conflict, while the prospect of a rapid interest rate hike by the Federal Reserve to combat rising inflation further contributes. to the circular saw effect of gold.

GLDM was launched on NYSE Arca in June 2018 in collaboration with the World Gold Council (WGC). The ETF’s low price immediately appealed to investors, with assets under management hitting the $1 billion mark less than 15 months after the fund’s launch.

GLDM’s success can also be attributed to its trading price per share of 1/50th of an ounce of gold, represented by the LBMA Gold Price PM (USD).

The equity valuation strategy provides a low entry point, opening gold investing to a wider clientele. This is one of the significant differences between the fund and the seasoned $64.5 billion SPDR Gold Shares ETF (GLD US)the first physically backed gold ETF in the United States, which was also born out of the partnership between the World Gold Council and SSGA.

An investment in GLD represents 1/10th of an ounce of gold. The fund charges 0.40%, which is the more expensive end of the gold ETF fee scale; however, GLD is still popular in its own right. As the largest gold ETP available, it benefits from robust liquidity and relatively low bid-ask spreads – characteristics highly valued, especially by institutional investors who want to make larger trades while maintaining low costs.

Indeed, as investors have renewed their interest in gold, GLD has garnered more than $4.5 billion in net new inflows since the start of the year, including exceptional inflows of $1.3 billion dollars in the first three days of March alone.

Other low-cost gold ETP providers will likely take note of SSGA’s action and consider their own initiative.

The fund’s closest competitors in terms of price include the $70 million Goldman Sachs ETF on Physical Gold (AAAU US), which is accompanied by an expense ratio of 0.18%; the billion dollars GraniteShares Gold Trust (BAR US), the price of which is 0.175%; the 2.7 billion dollars Aberdeen Standard Physical Gold Shares ETF (SGOL US), which costs 0.17%; and the $1.3 billion iShares Gold Trust Micro ETF (IAUM USA)at 0.15%.