Multiple gold ETF funds have reached new highs in terms of shares, and another gold ETF has announced a fee reduction.
On November 5th, ICBC Credit Suisse Fund announced that it will reduce the management and custody fees of ICBC Credit Suisse Gold ETF and its affiliated funds from today onwards. Specifically, the management annual fee rate and custody annual fee rate of the two products have been adjusted to 0.15% and 0.05%, respectively.
This is also the second gold ETF to announce a fee reduction after Huaxia Gold ETF. It is worth noting that as of now, the size difference between these two products is less than 100 million yuan, and the fee levels of the two products are comparable after the fee reduction.
Since September, funds have once again flowed into gold ETFs, with 7 ETFs linked to SGE Gold 9999 having a net subscription share of over 2.3 billion since September, increasing in size to 66.586 billion yuan. These 7 products all set a new high for fund shares yesterday.
Looking ahead to the future, fund managers have analyzed that with many important events approaching intensively, the market's game will become increasingly fierce. Gold or some resistance. However, the complexity of geopolitical factors and the uncertainty facing the global economy may increase the attractiveness of gold as a safe haven asset.
The second gold themed ETF to lower its fees recently
For this fee reduction, ICBC Credit Suisse Fund stated that it is to better meet the investment and wealth management needs of investors and reduce their investment costs. After the fee reduction of ICBC Credit Suisse Gold ETF and its affiliated funds, the fee rates of the two products have dropped to the lowest level of similar products.
In fact, as early as three weeks before the ICBC Credit Suisse Gold ETF and its affiliated funds lowered fees, Huaxia Gold ETF also announced a fee reduction. At present, among the 7 ETFs linked to SGE Gold 9999, only the ICBC Credit Suisse Gold ETF and Huaxia Gold ETF have adopted a low fee level of "management annual fee rate of 0.15% and custody annual fee rate of 0.05%", while the rest still maintain a "management annual fee rate of 0.5% and custody annual fee rate of 0.1%".
As of November 4th, the total size of these 7 gold themed ETFs is 66.586 billion yuan, of which the ICBC Credit Suisse Gold ETF has a size of 997 million yuan, ranking 6th, and the Huaxia Gold ETF (with a size of 1.068 billion yuan) ranks 5th.
Multiple gold ETFs set new highs in market share
While gold ETFs have successively lowered their fees, funds have recently flowed into gold ETFs again. The total number of fund shares of ICBC Credit Suisse Gold ETF reached a new high of 167 million as of November 4th, with a significant increase in fund shares since September. Data shows that fund shares have increased by 101 million since early September.
The size of the fund once exceeded the 1 billion yuan mark, but has now fallen back to 997 million yuan.
Overall, since September, the 7 ETFs linked to SGE Gold 9999 have maintained net subscriptions. As of November 4th, a total of 2.363 billion ETFs have been net subscribed, with a total size of 66.586 billion yuan.
As the largest ETF linked to the index, the Hua'an Gold ETF also set a new high of 4.813 billion fund shares on November 4th, with its size increasing to 28.888 billion yuan. Since September, the ETF has received a net subscription of 538 million shares.
During this period, the E Fund Gold ETF and Boshi Gold ETF were also net subscribed for more than 500 million shares. As of November 4th, the total number of fund shares reached a new high of 2.286 billion and 2.7 billion respectively, and the fund size increased to 13.58 billion yuan and 14.054 billion yuan. In addition, the total number of shares in gold ETFs under Guotai Fund, Huaxia Fund, and Qianhai Open Source Fund also reached a new high on November 4th.
Recently, the World Gold Council's "Review and Trend Analysis of China's Gold Market in the Third Quarter of 2024" also mentioned that the strong rise in gold prices in July and September attracted fund inflows, but failed to fully offset the outflows in August. In the third quarter of this year, the outflow of gold ETFs in the Chinese market was about 520 million yuan (about 1 ton), ending the inflow trend of four consecutive quarters.
However, the total asset management scale of gold ETFs in the Chinese market increased by 8% due to strong gold prices, reaching a new historical high of 55 billion yuan (7.8 billion US dollars).
Investment opportunities as the US presidential election approaches
From the perspective of fund performance, the above-mentioned gold ETFs saw a net asset value increase of over 8% in the third quarter and continued to grow since the fourth quarter, with a current increase of over 4%.
Behind the continuous rise, Xu Zhiyan, the fund manager of Hua'an Gold ETF, mentioned in the third quarter report of the ETF that the good performance of gold is based on three major factors. One is that the Federal Reserve's interest rate cut in September is expected to continue the cycle of interest rate cuts in the future. The overseas monetary environment is loose, and the overall trend of US bond rates and the US dollar is declining, which has a relatively positive impact on gold. Secondly, under the influence of de dollarization factors, overseas central banks continue to purchase gold. Thirdly, with the intensification of global geopolitical conflicts and the increasing uncertainty of major asset classes, gold has important allocation value.
In the long run, the United States is currently facing dual pressures of high debt and high interest rates, which will increase its fiscal burden and affect the credit of the US dollar in the future. In his view, as a response, the necessity of allocating gold is increasing.
Looking ahead from the current perspective, there may be differences in the specific implementation path of the Federal Reserve's interest rate cut, but according to the September dot matrix chart, the median policy rate in 2026 is 3.1%. "Liang Pusen and Kong Fang, fund managers of Qianhai Open Source Gold ETF, also believe that there is still significant room for the current US policy rate to fall compared to the long-term interest rate target.
From historical data, except for the interest rate cut cycle that began in September 1998 where the international gold price slightly fell by 0.59%, in other interest rate cut cycles, the international gold price has achieved good gains from the first to the last interest rate cut.
In addition, according to the "Budget and Economic Outlook: 2024-2034" report released by the Congressional Budget Office (CBO), the total US deficit will increase from $1.6 trillion in fiscal year 2024 to $2.6 trillion in 2034, with an annualized compound growth rate of about 4.97%, significantly higher than the average growth rate of about 3.7% from 1974 to 2023. In this situation, the United States' efforts to reduce debt pressure through the depreciation of the US dollar and inflation also contribute to the rise of the gold price center, "they said.
In the medium to long term, they also mentioned that geopolitical factors remain complex, the global economy faces uncertainty, and the allocation of gold has a certain insurance attribute.
According to the latest analysis from Boshi Fund, the results of this week's US election will be announced, followed by the Federal Reserve's interest rate meeting. Numerous important events are approaching intensively, and the market's game will become increasingly fierce. The strengthening of the US dollar and tightening monetary policy may ultimately bring some resistance to gold. However, the intensification of trade frictions may increase the attractiveness of gold as a safe haven asset.