Barclays Bank has launched two exchange-traded notes (ETN) offering exposure to gold and silver with no fees, the first of their kind.
The iPath Gold ETN (GBUG) and the iPath Silver ETN (SBUG) have listed in the US. They offer exposure to the precious metals by futures contracts with GBUG tracking the iPath Gold ETNs track the Barclays Gold 3 Month Index Total Return and SBUG tracking the iPath Silver ETNs track the Barclays Silver 3 Month Index Total Return.
GBUG and SBUG use derivatives to match the total return provided by three-month forward gold and silver prices, respectively.
A zero-fee ETF launched in the US in April by SoFi which has waved the management fee for at least the first 12 months of trading.
These ETNs differ to physically-backed ETPs by solely relying on the derivatives for performance. Physically-backed ETFs, like the one announced by HANetf in September, have the corresponding value of gold allocated and held in secure storage.
Ian Merrill, managing director and head of US equity derivative sales, said in a statement: “Since Barclays brought the first ETNs to the US market in 2006, we have been consistently focused on providing investors with innovative and efficient products.
“Today marks another exciting day in the evolution of Barclays’ iPath platform with the introduction of the first-ever ETNs that have no investor fees, and the first-ever no-fee ETPs offering exposure to precious metals.”