Home to $36.58 billion in assets under management as of May 3, the SPDR Gold Shares (NYSE: GLD) is the world’s largest exchange traded fund backed by physical holdings of gold.
While GLD remains the go-to choice among gold ETFs for many professional investors due to robust liquidity and tight spreads, it has been losing market share to lower costs rivals, such as the iShares Gold Trust (NYSE: IAU).
The World Gold Council, which sponsors GLD, is looking to make its presence felt in the low-fee gold ETF tussle with a cheaper product of its own.
“The World Gold Council, owner of the world’s largest gold-backed exchange traded fund, is launching a new fund with a cut-price management fee to fend off rivals with lower charges, Reuters reported, citing an unidentified source close to the issue.
The WGC’s move to compete on fees is notable because GLD charges 0.4 percent per year, or $40 on a $10,000 investment. That is 15 basis points higher than the annual fee on IAU. IAU debuted two months after GLD and has $12.21 billion in assets under management today.
The GraniteShares Gold Trust BAR 0.07% debuted in August and charges 0.2 percent per year. The ETF has $14.44 million in assets.
It is expected that the new WGC fund will charge in the area of 0.25 percent annually, according to Reuters.