Industry Updates

DWS to offer Europe’s cheapest gold ETC after fee cut

The move could spark a fresh fee war on the continent

Theo Andrew

a close-up of a gold bars

DWS is set to offer the cheapest physical gold exchange-traded commodity (ETC) on the market after cutting its fees by one basis point (bps).

In a shareholder announcement, DWS said the Xtrackers IE Physical Gold ETC Securities (XDGU) will see its total expense ratio cut from 0.12% to 0.11% on 1 December.

XDGU now stands out in a fiercely competitive market that sees its four biggest rivals – Amundi, Invesco, BlackRock and WisdomTree – offering gold ETCs at 12bps.

The £2.4bn ETC is still a way off the largest gold product in Europe, the £12.5bn Invesco Physical Gold ETC (SGLD).

Chart 1: Five cheapest gold ETCs in Europe




Xtrackers IE Physical Gold ETC Securities (XDGU)



Invesco Physical Gold ETC (SGLD)



iShares Physical Gold ETC (SGLN)



Amundi Physical Gold ETC (GLDA)



WisdomTree Core Physical Gold ETP (GLDW)



The gold price moved to a seven-month high at $2,044 an ounce on 29 November as investors become increasingly convinced the Federal Reserve has finished raising interest rates.

Traders are now pricing in a 40% chance of a rate cut by March 2024 if inflation continues its downward trajectory.

Declining US 10-year bond yields and a weakening US dollar have also boosted gold prices.

The move by DWS could spark a fresh fee war following a period of relative quiet for ETCs holding the commodity.

SGLD saw its fees halved in the 18 months between February 2020 and November 2021 from 0.24% to 0.12%, as issuers vied for assets flowing into gold at the onset of the COVID-19 pandemic.

Over that period, WisdomTree, BlackRock and DWS all cut fees on their gold ETCs several times while Amundi came to market what was at the time Europe’s cheapest at 0.15%.

In March 2021, DWS cut fees across its currency-hedged physical gold ETCs, also making them the cheapest on the market.

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