FinEx ETF, which is part of FinEx Group, the international investment house, has launched the first fully regulated gold fund available as an ETF in the European Union, the FinEx Physically Held Gold ETF, backed by physically held gold bullion in vaults in London.

The new fund tracks the price of gold calculated using the London gold fixing price set in US dollars on each trading day. Shares in the ETF will be available in US dollars and Russian rouble, the firm said in a statement.

The FinEx Physically Held Gold ETF has been listed on the Irish Stock Exchange and cross-listed on the Moscow Exchange via a passporting mechanism pioneered by FinEx ETF.

“Our gold ETF is the first regulated Irish gold fund to list as an ETF. In Russia, cross listed investment products have to be fully regulated, so we have launched this product as an ETF rather than an exchange traded commodity (ETC) or note. Investing in gold via an ETF is a secure and safe way to gain exposure to this commodity, and being backed physically provides reassurance to investors. Our research shows there is substantial appetite among investors for gold now and going forwards. We anticipate significant demand for this product, especially in Russia,” said Simon Luhr, managing partner and chief executive, FinEx Capital Management.

A positive outlook for gold

Citing its own research, FinEx ETF reveals that 42 per cent of institutional investors believe that the price of gold will increase over the next one to three years, including 4 per cent who anticipate a dramatic rise. Only 14.5 per cent anticipate a fall in value, the firm said.

FinEx’s research shows that institutional investors identify the two main drivers of a rise in the value of gold will be fear of another financial shock (41 per cent describing this factor as “very significant” or “significant”), and geopolitical uncertainty (38.5 per cent describe this factor as “very significant” or “significant”).

ETFS/ETPS – popular for investing in gold

Nearly half (49 per cent) of institutional investors said that ETFs/ETPs were their ‘investment vehicle of choice’ for investing in gold; versus 16.5 per cent for pooled gold accounts; 4.1 per cent for un-hedged gold stocks; and 1 per cent for both bullion and futures.

In addition, 53 per cent of institutional investors said that cost efficiency was a benefit offered by ETFs/ETPs when investing in gold, followed by liquidity (38 per cent said this) and transparency (22 per cent), the firm said.

FinEx ETF said that it anticipates strong growth in the ETF market for the next few years, with an increasing proportion to be fuelled by investors in emerging markets.