Industry Updates

SPDR and iShares dominate July’s gold ETF flows

George Geddes

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July was another positive month for gold-backed ETFs in terms of flows. Global assets under management in the yellow metal grew by 2%, according to the July fund flows report by the World Gold Council (WGC).

The WGC found gold ETFs had $2.6bn of global net inflows last month, meaning the collective gold holdings grew by 52t to 2,600t, the largest in over six years. The most popular products were from two industry giants, BlackRock’s iShares and State Street’s SPDR.

The SPDR Gold Shares (GLD) had inflows of $1.4bn for July, with the iShares Gold Trust (IAU) and the iShares Physical Gold ETC (IGLN) pulled in a total of $838.8m.

At the end of July, GLD and IAU produced year-to-date returns of 7.3% and 7.4%, respectively, with IGLN slightly ahead producing 8.6%. The positive performance has continued into the first week of August as all three ETFs have YTD returns upwards of 13.5%.

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The majority of the $2.6bn global flows into gold-backed ETFs came from North America. The region contributed $2bn while Europe investors bought $483.5m worth of ETFs.

Funds from the UK received mixed reviews. Three of the top 10 funds with the largest inflows were from the UK, however, the two ETFs with the largest outflows were also from the UK.

The Invesco Physical Gold ETC suffered $193.1m worth of outflows as well as the ETFS Physical Gold lost $127.3m worth of assets.

One contributing factor could be the depreciating pound which fell 3.9% against the dollar over the course of July. Europe accounted for 45% of the global gold ETF market at the end of Q1.

For the first half of 2019, it was European investors who led the flows into the commodity as they seek haven from uncertainty around Brexit.

European gold ETFs have received $4.4bn in inflows over H1 2019, ahead of North America which pulled in $3.6bn over the same period.

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