ETF Securities partners with Royal Mint

ETF Securities has partnered with the Royal Mint to provide retail investors with an avenue to exchange their holdings of gold exchange traded products for gold coins.

The offer applies to only one of ETF Securities' range of physically backed gold exchange traded products, Gold Bullion Securities, which is listed on the London Stock Exchange. Launched in 2004 as Europe's first physically-backed gold exchange traded product, GBS has assets of $4.6bn.

"This new service enables retail clients to switch their holding of GBS for Sovereigns or Britannias knowing that their gold coins can be safely stored with or delivered by a UK government owned and regulated entity," said Frank Spiteri, head of retail distribution strategy at ETF Securities.

A 4.5 per cent fee will be applied to the total number of GBS redeemed in exchange for the gold coins.

Mr Spiteri said the offer had been keenly priced to ensure that investors would receive better value than if they simply paid a brokerage fee to redeem GBS on the open market and then bought gold coins from a dealer.

Providers of gold ETFs (funds and products) have borne the brunt of the sell-off in the gold market this year.

ETF Securities has seen investors withdraw $3.3bn in the first seven months of 2013, mainly from its gold products, a sharp contrast to 2012 when the company attracted inflows of $2.9bn.

As a result of the investor outflows and the sharp fall in the gold price, total assets managed by ETF Securities have dropped 29.2 per cent from $29.1bn at the start of 2013 to $20.6bn at the end of July, according to ETFGI, a consultancy

The partnership is likely to attract interest as gold ETF providers and coin dealers normally regard themselves as being in competition with each other.

But Richard Samuels, bullion manager at the Royal Mint, said it was part of the Mint's strategy to enable precious metals investors to access its products through schemes such as this.

"We are very pleased to work with ETF Securities on this initiative to add a further option for clients to redeem and vault [store] physical bullion from the Royal Mint," said Mr Samuels.

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