Study investigates the costs incurred in purchasing and trading gold
Xetra Gold has lowest overall costs of all physically backed ETCs
Deutsche Börse Commodities: The Steinbeis School of Management and Innovation, Berlin, has conducted a study on the costs associated with purchasing and trading gold in Germany, looking at different investment opportunities, volumes and time horizons.
The study concluded that for short and medium-term investments in gold, the purchase of physically backed ETCs is the most cost-effective option. Among these products, Xetra Gold has the lowest total costs. Considerably more expensive according to the study are ETCs that only secure a claim to payment but are not backed by physical gold.
In comparison to gold from precious metal traders, physically backed gold ETCs with subsequent delivery are a better deal – though only at quantities of around five kilos and above.
“The Steinbeis study proves that investors in Xetra Gold have one of the most cost-effective opportunities to acquire and trade physical gold. The low overall costs are due not least to a very low spread between purchase and sales price, which generally stands at only 0.1 percent. There is no ETC at Deutsche Börse that is traded more liquidly than Xetra Gold,” said Martina Gruber, managing director at Deutsche Börse Commodities GmbH. “In addition to the low overall costs, investors value Xetra Gold's simple construction. It tracks the spot price of one gram of gold in euros and is physically deliverable at the same time."
Deutsche Börse Commodities GmbH holds 53.3 tons of gold worth over €2.3 billion (as at: 31 October 2012).
The Xetra-Gold bond (ISIN: DE000A0S9GB0) combines the advantages of physical gold with the transparency and low costs of exchange-trading of securities. There is no ongoing management fee. Each bond represents the option of delivery of one gram of gold and can be bought or sold continuously via the Xetra trading platform. Clearstream Banking Frankfurt (CBF), a Deutsche Börse subsidiary, stores the gold in its vault. The physical gold is supplied, monitored and processed by industry partner Umicore AG & Co. KG. The safe custody of the gold reserves at Clearstream meets high security standards and saves investors the costs of transporting and physically storing the gold. Private investors can obtain the underlying gold in physical form from their bank if desired. The physically backed debt instrument Xetra Gold was admitted for trading in December 2007 and has since become the commodity with the highest turnover of all ETCs listed on the Frankfurt Stock Exchange. The product meets the provisions of the European UCITS directive. www.deutsche-boerse.com/xetragold
About Deutsche Börse Commodities GmbH
The issuer Deutsche Börse Commodities GmbH, based in Frankfurt, is a joint venture between Deutsche Börse AG and the banking partners Commerzbank AG, Deutsche Bank AG, DZ Bank AG, B. Metzler seel. Sohn & Co. KGaA, and Swiss-based bank Vontobel. Umicore AG & Co. KG, a Group subsidiary of Umicore s.a. which operates several gold refineries across the globe and manufactures gold bars, is also a partner. The partners bundle their stock exchange, financial market, settlement, custody and logistics expertise and provide an efficient and transparent market in the financial centre of Frankfurt for gold trading in Europe. With just one product, Deutsche Börse Commodities GmbH is the second largest issuer of ETCs/commodity certificates traded on stock exchanges in Germany.
Xetra® and Xetra-Gold® are registered trademarks of Deutsche Börse AG.