The Royal Mint Physical Gold ETC (RMAU), the first physically backed gold ETC to be launched in partnership with a European sovereign mint, has crossed the $500 million AUM milestone.
The Royal Mint Physical Gold ETC has surpassed $500m AUM.
Assets in the ETC have swelled 80.2% thus far in 2022, rising from $278m at the start of the year to reach $501m as of the market’s close on Monday 21 March 2022.
AUM growth has been driven by both robust inflows and strong gold price performance as investors have sought to buffer their portfolios against rising inflation and geopolitical risks brought to the fore by the Russo-Ukrainian war.
Highlighting the ETC’s safe haven qualities, RMAU saw net inflows of $153.8m in February – including a sizable inflow from Quintet Private Bank – as the war in Ukraine got underway and has picked up a further $45.7m month-to-date in March as the conflict escalated.
The price of bullion also recently reached its highest level since August 2020, touching $2,070/oz. in intraday trading on 8 March, representing a year-to-date gain of 13.2% from gold’s 2022 starting price of $1,829/oz.
Volatility in gold has noticeably increased this year, perhaps indicating that the market is still wrestling with the long-term implications of the war in Ukraine as well as the speed and extent to which central banks will tighten monetary policy to combat soaring inflation. The gold price has pulled back somewhat since its 2022 high and is currently trading around $1,930/oz.
RMAU was launched in February 2020 to offer investors a low-cost, liquid, and convenient vehicle for spot gold price exposure. The ETC was brought to market through a collaboration between The Royal Mint and London-based white-label ETF platform HANetf.
Any investment in the ETC is 100% backed by physical gold stored at The Royal Mint’s purpose-built vault near Cardiff, Wales. This unique arrangement may appeal to investors who wish to diversify their custody arrangements by owning an ETC that stores the precious metal outside of the mainstream financial system.
All gold bars underlying the ETC comply with LBMA Good Delivery criteria and are sourced in line with the association’s Responsible Sourcing Programme, the highest standards in the industry. This means that the underlying gold is from conflict-free sources and from producers maintaining higher standards of corporate governance and environmental and sustainability practices.
Additionally, The Royal Mint recently announced that RMAU will be the first physical gold ETC globally to use bars made from 100% recycled gold including gold that has been extracted from electronic waste such as laptops and smartphones. Unlike many other commodities, gold can be infinitely recycled with no degradation in quality. Recycled gold bars will be added to RMAU over time, and their number – as well as the sources of recycled material – will increase based upon future demand.
The link with the Royal Mint also means that securities in the ETC can be redeemed, subject to fees, for physical gold bars and coins, with delivery and storage provided by The Royal Mint.
The ETC comes with an expense ratio of 0.22% and is available to trade on London Stock Exchange in US dollars (RMAU LN) and pound sterling (RMAP LN) as well as on Xetra (RM8U GY), Borsa Italiana (RMAU IM), and Euronext Paris (RMAU FP) in euros.
Commenting on the milestone, Hector McNeil, co-CEO and co-Founder at HANetf, said: “In less than two years we have seen RMAU reach half a billion dollars in AUM. Its AUM growth is due to the unique nature of RMAU, giving it wide appeal among investors. The ETC is produced in partnership with the Royal Mint, meaning all the gold custodied is held in the Royal Mint’s highly secure vault in Llantrisant, Wales. The ETC also has appeal to investors worried about the ESG aspects of investing in gold. The ETC’s gold bars are London Bullion Market Association (LBMA) Good Delivery bars. These bars held are 100% in compliance with the LBMA’s 2019 Responsible Sourcing guidelines. This is the highest responsible sourcing standard available.”