Royal Mint Responsibly Sourced Physical Gold ETC surpasses $1bn AUM | ETF Strategy

The Royal Mint’s physical gold ETC – the Royal Mint Physical Gold ETC (RMAU) – has surpassed $1 billion in assets under management, signaling increased investor demand for gold-backed products with a strong ESG focus.

Investors have the option to redeem their ETC shares for physical gold bars and coins produced by The Royal Mint.

RMAU, launched in 2020 through a collaboration between the Royal Mint and London-based white-label ETP platform HANetf, has achieved a notable 35% growth in AUM year-to-date, driven by both positive gold price appreciation and strong investor inflows.

Gold has risen 27.8% in 2024, as of the end of September, hitting a recent record high of $2,635/oz. fuelled by inflation concerns, geopolitical tensions, and mixed central bank policies. Gold remains attractive for investors seeking diversification and protection against economic uncertainty.

RMAU’s success, in contrast to many other gold ETCs experiencing net outflows this year, is attributed to several unique features that distinguish it in the market, according to the Royal Mint.

One of the defining aspects of RMAU is its unique custody arrangement. Unlike the majority of gold ETCs, which store their gold in vaults located in or near London, RMAU’s gold is held outside the mainstream financial system in The Royal Mint’s highly secure, 24/7-guarded vault in Llantrisant, Wales. This offers an additional layer of diversification for investors, especially those looking to mitigate concentration risks associated with custodianship in traditional banking systems.

The ETC is fully backed by fine gold bars that meet the London Bullion Market Association’s (LBMA) 2019 standards for responsibly sourced gold. This ensures that all gold held by RMAU adheres to strict ethical sourcing practices, minimizing the risk of involvement with conflict or illegitimate sources. Notably, RMAU is also committed to sustainability, with over half of its gold holdings comprising 100% recycled gold. Recycled gold generates over 90% less carbon emissions compared to mined gold, offering investors a lower carbon footprint option within their portfolios.

In addition to the ESG appeal, RMAU provides the option for physical redemption with investors having the ability to redeem their holdings for physical gold bars or bullion coins produced by The Royal Mint.

RMAU is listed on London Stock Exchange in US dollars and pound sterling, as well as on Xetra, Borsa Italiana, and Euronext Paris in euros.

It comes with a total expense ratio of 0.25%.

Andrew Dickey, Divisional Director of Precious Metals at The Royal Mint, commented: “This achievement speaks volumes about the growing demand for sustainable investment options and reflects the fund’s strong sustainability credentials, which have truly resonated with investors. The exceptional growth of this ETC also highlights The Royal Mint’s broader commitment to sustainability and our trusted, highly secure vaulting services. Additionally, it reflects the increasing attention on gold as a long-term investment, especially given its strong recent performance and enduring role as a safe haven.”

Hector McNeil, Co-Founder and Co-CEO of HANetf, added: “While gold is a staple of many portfolios, some investors are concerned about whether it meets their sustainable values. RMAU is a unique way to gain exposure to responsibly sourced gold. The ETC is also independently audited to add a further level of assurance as to the adherence with these strict standards. This allows investors to access gold that aligns with their values.”