Global X ETFs introduces latest innovation in Gold-backed ETFs

Global X ETFs introduces latest innovation in Gold-backed ETFs

Global X ETFs have launched the Global X Gold Bullion ETF (ASX: GXLD), expanding the company’s range of gold-backed products. GXLD will compliment Global X’s flagship product, Global X Physical Gold (ASX: GOLD), providing investors more choice in selecting a product that is best suited to their overall investment strategy.​

GXLD aims to replicate the movements in the Australian dollar price of gold, less the annual management fee, by investing in physical gold bullion bars. With a management fee of 0.15% per annum, it is currently the lowest-cost physical-backed gold ETF in the Australian market, providing a cost-effective option for investors seeking longer-term exposure to gold as a core portfolio allocation.​

The launch represents the latest achievement in Global X’s pioneering history in gold-backed ETFs, having reached over $3 billion in FUM, representing a 70% market share. Notably, Global X made history by introducing the world’s first gold-backed exchange-traded product, GOLD, in 2003.​

Global X ETFs Chief Executive, Evan Metcalf said, “As the largest and most liquid gold-backed exchange traded product in Australia, our flagship product GOLD is valued by our clients, especially for investors prioritising transaction costs and liquidity. GXLD allows us to deliver the same value to investors looking to invest in gold over the longer-term. GLXD’s lower management fee of just 0.15% has the potential to translate into significant cost savings for these investors over long time horizons.”

“This resilience presents a promising opportunity for investors. With the launch of GXLD, we’re excited to offer Australian investors a variety of choice that allows them to capitalise on the enduring value of gold, based on what is best suited to their unique portfolio needs,” Metcalf said.

Gold prices have surged 20 per cent over the past two months to record highs above US$2400 (AU$3754) an ounce despite recent challenges like elevated real bond yields and a robust US dollar, which historically have worked against gold’s favour.

Global X ETFs Senior Product and Investment Strategist, David Tuckwell said, “The gold price has been driven up to record highs largely by central bank buying – particularly in China as it aims to diversify its reserves away from the US dollar. China has seen gold buying increase more broadly as investors seek out returns outside its underperforming equity and property markets.

“Although the gold price has seen a small correction in recent weeks, looking into the second half Global X believes gold prices are well supported. Statistically, the best two predictors of the gold price are real yields on US government debt and the strength of the US dollar.  With markets forecasting these to possibly fall late in 2024 or early in 2025, if history is any guide, we could be in for another leg up in the gold price.”

GXLD is the 37th product in the company’s strong product lineup in Australia.