Amundi Physical Metals plc has announced the issuance of a new tranche of Exchange-Traded Commodities (ETC) Securities, further expanding its gold investment offerings. These securities, linked to the performance of physical gold, are part of the firm’s Secured Precious Metal Linked ETC Securities Programme, providing investors with an alternative route to gain exposure to the precious metal without the need for physical possession.
On March 31, 2025, Amundi issued 94,500 ETC Securities as part of tranche number 674. Each ETC Security in this tranche represents an entitlement to 0.03967951 fine troy ounces of gold, allowing investors to participate in gold price movements while benefiting from the convenience of an exchange-traded product.
Key Features of Amundi Gold-Linked ETC Securities
- Gold-Backed Investment: The ETC Securities are secured by physical gold stored in allocated accounts, ensuring transparency and security.
- Close Tracking of Gold Prices: Designed to follow the spot price of gold, these securities offer direct exposure to the precious metal.
- Low Annual Expense Ratio: With a Total Expense Ratio (TER) of 0.12%, investors can gain gold exposure at a competitive cost.
- Long-Term Investment Horizon: The securities have a scheduled maturity date of May 23, 2118, making them a viable long-term investment.
- Global Market Accessibility: The securities are traded on leading exchanges, including Euronext Paris, Euronext Amsterdam, Deutsche Börse, Borsa Italiana, and the London Stock Exchange (LON: LSEG).
Why Invest in Amundi’s Physical Gold ETC Securities?
1. Diversification and Portfolio Stability
Gold is a well-known hedge against inflation and economic uncertainties. By investing in Amundi’s gold-linked ETC Securities, investors can diversify their portfolio while reducing overall risk exposure.
2. Cost-Effective Gold Exposure
Traditional gold investment methods involve high storage and insurance costs. Amundi’s gold-backed ETC Securities provide a cost-efficient alternative with a low annual expense ratio of 0.12%.
3. Liquidity and Accessibility
With listings on multiple global exchanges, including the International Quotation System of the Mexican Stock Exchange, investors can easily trade these securities, ensuring high liquidity and ease of access.
4. Secure and Transparent Structure
The ETC Securities are secured, limited recourse obligations backed by physical gold. This ensures that investors have recourse to the underlying asset, providing confidence in their investment.
Understanding the Investment Risks
While gold-linked ETC Securities offer a compelling investment opportunity, investors must be aware of potential risks, including:
- Gold Price Volatility: The value of these securities fluctuates based on gold market prices.
- Market Liquidity Risks: Although traded on multiple exchanges, liquidity may vary depending on market conditions.
- Exchange Rate Risks: As gold is priced in USD, investors trading in other currencies should consider exchange rate fluctuations.
- Limited Recourse: Investors have recourse only to the gold backing the securities, meaning any adverse market conditions could impact returns.
Frequently Asked Questions (FAQs)
1. What is an ETC Security?
An ETC Security is a financial instrument designed to track the performance of a commodity, in this case, gold. It allows investors to gain exposure to the asset without needing to hold it physically.
2. How does Amundi’s Gold ETC differ from Gold ETFs?
While both ETCs and ETFs offer exposure to gold, ETCs are structured as debt instruments backed by physical gold, whereas ETFs hold gold within a fund structure.
3. What is the minimum investment required?
The minimum investment varies depending on the exchange and broker, but typically, investors can purchase a single unit of the security.
4. Is the gold backing Amundi’s ETC Securities audited?
Yes, the physical gold holdings are stored in allocated accounts and regularly audited for transparency.
5. How are these securities taxed?
Tax treatment varies by jurisdiction. Investors should consult a financial advisor to understand the specific tax implications in their country.
6. Can I redeem my ETC Securities for physical gold?
Amundi’s Gold ETC Securities are designed for market trading rather than direct gold redemption. However, institutional investors may have redemption options under specific conditions.
7. What happens if Amundi Physical Metals plc defaults?
Since the securities are secured obligations, investors have recourse to the underlying gold. However, market risks and other external factors could impact recoverable amounts.
8. Where can I buy Amundi Gold-Linked ETC Securities?
These securities are listed on multiple exchanges, including Euronext, Deutsche Börse, Borsa Italiana, London Stock Exchange, and more. Investors can purchase them through brokers offering access to these exchanges.
9. What fees are associated with these securities?
The securities carry an annual Total Expense Ratio (TER) of 0.12%, covering operational costs.
10. What factors affect the performance of these securities?
The primary factors include:
- Gold market price movements
- Inflation trends
- Interest rate changes
- Currency fluctuations (especially USD value)
Final Thoughts
Amundi’s latest issuance of gold-linked ETC Securities offers an excellent opportunity for investors to gain exposure to gold in a cost-effective and secure manner. Whether for diversification, inflation hedging, or long-term investment, these securities provide a flexible and transparent way to invest in gold without physical ownership hassles.
Disclaimer:
This article is for informational purposes only and should not be considered financial advice. Investing in commodities and securities involves risks, and past performance does not guarantee future results. Always consult with a qualified financial advisor before making investment decisions.
