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Gold ETCs | Security, Responsible Gold Bars & Physical Redemption

Gold ETC Security

Security is obviously paramount when it comes to owning gold and what better security than a site trusted by royalty and governments? RMAU, the Royal Mint Physical Gold ETC is the first gold ETF to store the physical LBMA ‘Good Delivery’ bars in The Royal Mint’s purpose-built highly-secure vault in Wales .The Royal Mint’s 35-acre site is home to a purpose-built precious metals storage facility, which is the product of over 1,100 years of experience in safeguarding coinage and precious metals.

This secure location is trusted by royalty and governments to accommodate the production of UK circulating coins and coinage for an average of 60 countries every year and offers fully allocated and insured segregated storage of gold, silver and platinum coins and bars on behalf of clients around the world. With RMAU, investors have the first opportunity to own a gold ETC that custodies gold outside the European banking and clearing system, thereby removing a key source of systemic risk. Most other ETCs hold their gold at commercial banks located in major financial centres that are arguably at higher risk of terrorism and conflict and, as private institutions, have a higher risk of default.

Gold ETCs and Responsible Investing

RMAU also provides a solution for investors seeking to incorporate ESG goals to their portfolios: as the post-2012 gold bars backing RMAU are sourced on a best-endeavour basis from the LBMA’s Responsible Gold Sourcing Programme. This programme forces refiners to that ensures the gold has been extracted in a manner that does not cause, facilitate or support human rights abuses, terrorism or money-laundering. Other ETCs may hold pre-2012 gold that is of uncertain origin or includes gold sourced in conflict zones.

RMAU also offers greater flexibility and additional features for investors when buying and selling gold. Some investors prefer smaller denominations and each RMAU certificate entitles the holder to 1/100 troy ounce of gold, vs a typical  gold ETC that offers 1/10 troy ounce. This helps lowers the barriers to gold investing, creating a level playing field between large and small investors and enables detailed fine tuning of allocations.

Physical redemption with a gold ETC

When investors seek to redeem, they can benefit from a new and unique featured offered by RMAU, tied intimately to its history. Established by King Alfred the Great in 886 AD, The Royal Mint is one of the 10 oldest companies in the world and has more than 1,000 years of expertise in producing coinage – a capability unmatched in any other institution or ETC sponsor. This means when investors choose to sell RMAU they can redeem their units for physical gold bullion bars, cash or uniquely small denomination gold coinage. Not all gold ETCs offer physical redemption and those that do may require a nominated account to store the gold. With RMAU, large investors can have gold delivered to the site of their choosing while smaller investor can, if they choose, have physical gold bars or coins shipped to their house by The Royal Mint. 

As geo-political uncertainties roil markets, gold ETCs will continue to have an important role to play for most portfolios. However, modern investors require modern approaches and we believe that when it comes to gold, the most modern approach may be offered from one of the world’s oldest institutions. Sometimes you can’t beat experience. 

When you trade gold ETFs, your capital is at risk. 

About RMAU

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