Gold ETF revenues remain supreme for issuers

Model portfolio company Algo-Chain has launched its 100 ETF Power Brokers table comprised with the largest revenue making ETFs listed in Europe. The revenue is calculated my multiplying the total expense ration (TER) with the fund’s assets under management (AUM).

Unsurprisingly, BlackRock’s iShares dominates the table, holding the four largest money-making ETFs. Sitting at the top of the table is the iShares JP Morgan EM Local Govt Bond UCITS ETF which has $9.2bn in AUM. With a TER of 50bps, the fund alone makes BlackRock $46.1m in revenue each year.

Some reoccurring themes which appeared heavily in the list include emerging market equities, high yield corporate bonds, S&P 500 and most surprising, gold. There are nine gold ETFs which appear in the table, three of which appear in the top 10.

The Xetra (4GLD) Gold ETF (#7), the WisdomTree Physical Gold (#8) and the ZKB Gold ETF (#10) make $30m, $26.7m and $25m a year, respectively. 4GLD has one of the cheaper TERs with 36bps whereas the other two cost 39bps and 40bps.

Fourth in the table is the Invesco Physical Gold ETC (SGLD) which makes $14.9m a year from its 24bps fee. Last week, SGLD had $306m of inflows amid a positive week for the commodity.

The top three gold ETFs are by no means the cheapest on offer in the table but still have the largest AUMs. The iShares Physical Gold ETC (SGLN) is 25bps, 11bps less than 4GLD but also holds $3.4bn less in AUM.

SGLN launched in 2011, four or five years after the launch of the three previously mentioned products. That means SGLN has been running for eight years with a far more attractive price but has not managed to attract all investors to make the switch. Nonetheless, it has built a respectable $4.9bn in AUM.

ETFs Rank TER AUM Revenue
Xetra Gold (4GLD) ETF #7 36bps $8.3bn $30.0m
WisdomTree Physical Gold #8 39bps $6.8bn $26.7m
ZKB Gold ETF #10 40bps $6.3bn $25.0m
Invesco Physical Gold ETC #16 24bps $6.2bn $14.9m
ETFS Gold Bullion Securities #27 40bps $3.3bn $13.4m
iShares Physical Gold ETC #29 25bps $4.9bn $12.3m
Xtrackers Physical Gold EUR Hedged ETC #34 59bps $1.9bn $11.3m
Xtrackers Physical Gold ETC (EUR) #79 25bps $2.6bn $6.4m
GAM Precious Metals – Physical Gold ETF #88 40bps $1.5bn $5.9m

Despite gold ETFs’ disappointing start to 2019 in terms of outflows, these nine gold ETFs hold a total of $41bn in AUM. BlackRock’s May ETP flow report said gold ETFs received inflows of $800m last month, the first positive month this year.

For such a large number of gold ETFs to appear in the table amid reports of heavy outflows, it would suggest only a small fraction of ETFs are being redeemed.

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