The Royal Mint has partnered with Luxembourg-based Quintet Private Bank to launch an Exchange-Traded Commodity (ETC) that uses recycled gold bars.
Quintet has seeded the Royal Mint Physical Gold ETC, listed on the London Stock Exchange, Deustche Boerse, Borsa Italiana and Euronext stock exchanges, with $170m. HanETF is distributing this product via its white label platform.
The groups highlighted gold, unlike many other commodities, can be infinitely recycled with no degradation in quality and therefore, they said, presents an investment opportunity for those seeking exposure to “innovative, recycled product”.
As an ETC, the Royal Mint Physical Gold ETC (ticker RMAU) will combine stock market trading with physical gold ownership. A statement said: “The first tranche of 100% recycled gold bars will circa 50,000 ounces of surplus gold from bullion coin production refined into 400oz LBMA good delivery bars. The recycled 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. RMAU is currently, and will continue to be, 100% backed by post-2019LBMA responsibly sourced, physical bars.”
Each gold bar is stored in the Royal Mint’s vault.
Andrew Dickey, director of precious metals at The Royal Mint, commented: “We’re delighted to work with HANetf and Quintet to champion responsible sourcing and circular economy practises. We already reuse a portion of our gold onsite to form gold bars, but this is the first time we have produced a dedicated recycled product for use within our ETC offering.”
Meanwhile, Myron Jobson, senior personal finance analyst at interactive investor, said while recycling is picking up apace, the product should not be taken at face value: “Recycling is very en vogue as part of a broader drive towards a more sustainable future – so too is gold, which is widely perceived as ‘safe haven’ investment amid the current heightened levels of stock market volatility.
“The new proposition by the Royal Mint combines both elements and neatly bundles them into an exchange traded commodity investment – making it an easily accessible and, with a total expense ratio of 0.22% a year, a relatively cheap way to invest in gold. The ETC could turn the heads of environmentally conscious investors seeking a sustainable play on gold.
“The ETC is not an entirely ‘green gold’ proposition as it first appears as the first tranche of the recycled gold bars will come from gold from bullion coins. The bars from gold recycled from electronic waste such as laptops and smartphones come later. Also, one wonders how much dirty energy is required in the process of creating the gold bars.”