Global gold-backed ETF flows

2019 Summary
January 8, 2020 www.gold.org

• some drop of its gains ($1,450/oz) in the early part of the

Gold-backed ETF holdings grew 14% in
fourth quarter as geopolitical resolutions (Brexit,
2019, reaching all-time highs US/China) were extended into 2020, while risky assets
continued to “melt higher.” However, gold finished the
2019 Highlights
year 4% higher in December, near the y-t-d highs, as
• North American and European funds drove almost all investors positioned ahead of 2020.
inflows each growing 14% in 2019
Demand
• SPDR® Gold Shares and iShares Gold Trust
Ultimately, gold-backed ETF inflows alongside central bank
collectively represented nearly half the global inflows
purchases were a large driver of global gold demand in
• Global gold-backed assets under management (AUM)
2019. Increased investor activity in the gold market was
grew 37% in US dollars during the year as a result of
also evident through trading volumes and positioning in
positive demand, combined with an 18.4% increase in
derivatives markets. Global trading volumes rose 27% y-o-y
the gold price.
to US$145bn per day in 2019, up from US$114bn per day
in 2018. Gold futures market positioning closed the year on
a positive note as COMEX net longs4 remained near all-
Global gold-backed ETFs and similar products had
time highs, well above long-term averages. And bullish
US$19.2bn, or 400 tonnes(t), of net inflows* in 2019 in
sentiment was reflected in the gold options market with
almost all countries, after holdings rebounded in
large call options purchases, where investors paid an all-
December.2 Collective ETF holdings reached all-time highs
time premium for upside calls compared to downside puts.
of ~2,900t in the fourth quarter.
2019 drivers continue into 2020
Regional overview
Though most global equity indices finished the year at or
North American funds led regional inflows in 2019, adding
near all-time highs, gold shone, realising its strongest price
206t (US$10.1bn, 14.4% AUM) as growing geopolitical
increase in ten years. The strength of gold was mainly the
tensions and the first Federal Reserve rate cuts in a decade
by-product of a dovish shift in monetary policy. Our
fuelled market uncertainty. European funds experienced
research indicates that a shift from a hawkish or neutral
inflows of 188t (US$8.8bn, 13.6%) driven primarily by UK-
stance to a dovish one has historically led gold to
based funds, which added 91t (US$4.1bn, 14.5%) on the
outperform – The impact of monetary policy on gold.
heels of ongoing Brexit concerns. Asian funds finished the
Additionally, investors may have been drawn to our
year relatively flat, losing 0.1t (US$12mn, 0.3%). Funds in
research that shows the positive impact of lower rates on
other regions grew 16.3%, adding 6.3t and US$311mn,
gold prices as well as the potential for additional gold
with most of the growth coming from Australian-listed
exposure (potentially replacing bonds) in a low-rate
funds.
environment. And with over 90% of sovereign debt trading
Price performance with negative real rates, the opportunity cost of investing in
Gold reached or was near all-time highs in every major G10 gold improved.
currency apart from the US dollar and Swiss franc. And
Looking ahead, many of gold’s 2019 geopolitical, market
gold’s US dollar price performance during 2019 (+18.4%,
and economic drivers could continue into 2020, as
$1,515/oz) tracked three distinct timelines:
discussed in our recent blog Key trends to watch as we
• relatively flat, near $1,300/oz, throughout May as the conclude 2019. While expectations for future US Federal
dollar strengthened and geopolitical concerns had yet to Reserve interest rate cuts have fallen, continued Fed
come to the forefront intervention in the repo market has led some to consider
• strong rally between early June and early September, this a form of quantitative easing through liquidity injection.
reaching a multi-year high of US$1,546/oz, as the Fed
While a “lite version” of a US/China trade deal was agreed
shifted to cutting rates for the first time since the
in principle, it has yet to be formally signed, and terms have
financial crisis and US/China trade tensions and Brexit
yet to be disclosed. Continued discussion of more
concerns increased
contentious policies, like intellectual property and currency
manipulation, are likely to come to the forefront. And while

01
PM Boris Johnson has secured a commanding majority in
the UK parliament, the impact of the 2020 Brexit has yet to Regional Flows1
be realised.
• North American funds had inflows of 206t (US$10.1bn,
Finally, multiple expansion in the global stock markets, as 14.4% AUM)
well as surprisingly low yields in speculative corporate debt, • Holdings in European funds increased by 188t (US$8.8bn,
continue to worry investors. A willingness to add risk, as 13.6%)
stock market sentiment remains at extremely bullish levels, • Funds listed in Asia were nearly flat losing 0.1t
is evidenced by VIX futures levels near all-time short levels. (US$12mn, 0.3%)
At times, historically, significant VIX short positioning has • Other regions had inflows of 6.3t (US$311mn, 16.3%).
preceded sharp stock market sell-offs and subsequent
rallies in the price of gold. Table 2: 2019 Flows by country*
Total AUM Holdings December Flows 2019
Country (US$mn) tonnes (US$mn) Flows
Table 1: 2019 Total global gold-backed ETF flows*
US 67,382 1,376.11 -8.67 10,283.79
Total AUM Change Flows Flows (%
(bn) tonnes (US$mn) AUM) UK 28,516 582.36 43.95 4,131.36

North America 70.5 206.2 10,124.8 14.35% Germany 17,998 367.56 212.21 2,308.63

Europe 64.7 187.9 8,800.0 13.59% Switzerland 16,456 336.07 175.71 1,142.03

Asia 3.9 0.0 -11.9 -0.31% Canada 3,164 64.62 2.20 -158.98

Other 1.9 6.3 311.2 16.28% China P.R.

Mainland 2,200 44.93 -77.96 72.78
Global inflows 442.4 20,968.7 14.86%
France 1,069 21.84 203.12 965.37
Global outflows -42.1 -1,744.6 -1.24%
South Africa 965 19.71 0.00 18.55
Total 141.1 400.3 19,224.1 13.63%
Australia 915 18.68 19.40 283.58
‘Global Inflows’ refers to the sum of changes of all funds that saw a net
India 804 16.42 -114.84 -106.10
increase in ounces held over a given period (eg, month, quarter, etc.).
Conversely, ‘global outflows’ aggregates changes from funds that saw ounces Japan 717 14.63 0.00 0.42
held decline over the same period. Italy 665 13.58 38.55 254.29
Source: Bloomberg; Company Filings; World Gold Council
Hong Kong SAR 149 3.04 -5.49 22.30
As of 31/12/2019
Liechtenstein 33 0.68 -1.14 -1.68
Turkey 32 0.64 0.83 9.07

Long-term trends
Malaysia 11 0.23 -1.24 -0.86
Thailand 5 0.11 -0.17 -0.25

As of 31/12/2019
• Global gold-backed ETFs added 400t (US$19.2bn, 13.6%)
Source: Bloomberg, World Gold Council
in 2019, driven by strong inflows in the second half of the
year
• UK- and German-based funds grew 15% and 13% during
the year, a by-product of Brexit concerns and negative
yields in Germany.
• North America added 206t compared to 188t in Europe in
2019
• Low-cost gold-backed ETFs in the US have seen positive
flows for 18 of the past 19 months and increased their
collective holdings by 60%.3

Global gold-backed ETF flows | 2019 Summary 02

Individual flows2
• In North America, SPDR® Gold Shares led global inflows
(106t, US$5.3bn, 16.3%), followed by iShares Gold Trust
(+80t, US$3.8bn, 33.0%) and SPDR® Gold Mini Shares
(+13.5t, US$602mn, 151.7%)
• Three UK-based funds led European inflows as iShares
Physical added 38t (US$1.8bn, 40.5%), WisdomTree
Physical Swiss Gold added 37t (US$1.6bn, 218.5%) and
Invesco Physical added 25.9t (US$1.1bn, 22.7%).
WisdomTree Physical Gold had the only meaningful
outflows in Europe, losing 15t (US$650mn, 9.8%), which
could have been a shift to similar funds in the region with
lower expense ratios.
• Bosera Gold’s listed fund in China led Asian inflows,
adding 4.4t (US$225mn, 59.4%), while Huaan Yifu, in
China, lost 5.5t (US$195mn, 18%)
December flows
Following November outflows, gold-backed ETF holdings
bounced back in December as funds added 13.8t
(US$486mn, 0.3%), driven almost entirely by Europe:
European funds added US$672mn, split between funds in
France, Germany and Switzerland. Flows in North American
and Other regions were mostly flat, while Asian funds gave
up 5.1% of assets. This came as the US$ gold price
rebounded nearly 4% during the month to close the year at
US$1,515/oz.
Q4 2019
Table 4: Q4 2019 flows by region*
As of
Q4 19 31/12/2019

• Australia’s ETFS Metal Securities led most of the ‘Other Change Flows Flows (%
region’ inflows adding 4.2t (US$214mn, 56.7%). Total AUM (bn) tonnes (US$mn) AUM)
North
Table 3: 2019 Individual top and bottom flows America 70.5 -6.7 -256.0 -0.36%
Change Flows Flows (% Europe 64.7 34.1 1,376.8 2.13%
Top 10 flows Country tonnes (US$mn) AUM)
Asia 3.9 -5.1 -320.7 -8.25%
SPDR Gold Shares® US 105.5 5,292.8 16.3%
Other 1.9 4.1 190.9 9.99%
iShares Gold Trust US 79.8 3,806.7 33.0%
Global inflows 83.6 3,699.5 2.62%
iShares Physical Gold ETC GB 38.0 1,762.7 40.5%
Global
WisdomTree Physical Swiss outflows -57.2 -2,708.6 -1.92%
Gold GB 37.0 1,634.5 218.5%
Total 141.1 26.4 990.9 0.70%
Invesco Physical Gold ETC GB 25.9 1,121.2 22.7%
‘Global Inflows’ refers to the sum of changes of all funds that saw a net
Amundi Physical Gold ETC FR 21.8 965.4 100.0% increase in ounces held over a given period (eg, month, quarter, etc.).
Xetra-Gold DE 22.4 962.5 12.9% Conversely, ‘global outflows’ aggregates changes from funds that saw ounces
held decline over the same period.
SPDR Gold MiniShares Trust® US 13.5 602.2 151.7%
Source: Bloomberg; Company Filings; World Gold Council
Xtrackers Physical Gold Euro
Hedged ETC DE 6.2 407.9 21.6%
Xtrackers Physical Gold ETC
EUR DE 6.7 325.6 12.8%

Change Flows Flows (%

Bottom 10 Flows Country tonnes (US$mn) AUM)

WisdomTree Physical Gold GB -14.9 -650.2 -9.8%

Huaan Yifu Gold ETF CN -5.8 -207.9 -19.3%
Ninepoint Gold Bullion Fund -
Series A CA -4.5 -196.7 -84.5%
Sprott Physical Gold & Silver
Trust CA -4.7 -162.0 -9.0%
Bosera Gold ETF I CN -2.6 -118.2 -61.8%
Nippon India ETF Gold BeES IN -0.1 -110.6 -33.0%
Swisscanto ETF Precious Metal
Physical Gold USD A CH -2.5 -107.2 -19.0%
NewGold Issuer Ltd ZA -1.7 -72.9 -9.2%
Swisscanto ETF Precious Metal
Physical Gold CHF A CH -1.7 -61.1 -12.6%
Swisscanto ETF Precious Metal
Physical Gold USD AX CH -0.6 -24.9 -11.6%

As of 31/12/2019
Source: Bloomberg, World Gold Council

Global gold-backed ETF flows | 2019 Summary 03

Relevant Charts
Chart 1: Gold-backed ETFs (and similar) flows by Chart 3: Gold-backed ETFs (and similar) holdings*
month* Flows ($bn) AUM ($bn)
Flows ($bn) 30 180
7.0 20 120
6.0
10 60
5.0
4.0 0 0
3.0 -10 -60
2.0 -20 -120
1.0
-30 -180
0.0
-1.0 -40 -240
-2.0 -50 -300
-3.0 2003 2005 2007 2009 2011 2013 2015 2017 2019
01/18 04/18 07/18 10/18 01/19 04/19 07/19 10/19 North America (lhs) Europe (lhs)
North America Europe Asia Other Asia (lhs) Other (lhs)
Total (rhs)
As of 31/12/2019
Source: Bloomberg, World Gold Council As of 31/12/2019
Source: Bloomberg, World Gold Council

Chart 2: Gold-backed ETFs (and similar) change in

holdings by month* Chart 4: Gold-backed ETFs (and similar) change in
Change (tns) holdings by year*
150 Change (tns) AUM (tns)
800 3,200
100 600 2,400
400 1,600
50
200 800
0 0
0
-200 -800
-50 -400 -1,600
-600 -2,400
-100 -800 -3,200
01/18 04/18 07/18 10/18 01/19 04/19 07/19 10/19 -1,000 -4,000
North America Europe Asia Other 2003 2005 2007 2009 2011 2013 2015 2017 2019
North America (lhs) Europe (lhs)
As of 31/12/2019 Asia (lhs) Other (lhs)
Source: Bloomberg, World Gold Council Total (rhs)

As of 31/12/2019
Source: Bloomberg, World Gold Council

Global gold-backed ETF flows | 2019 Summary 04

Chart 5: Gold-backed ETFs (and similar) holdings*
Holdings (US$bn) Gold (US$oz)
160 1,900
140 1,700
120 1,500
100 1,300
80 1,100
60 900
40 700
20 500
0 300
2004 2006 2008 2010 2012 2014 2016 2018
North America Europe Asia
Other Gold, US$/oz

As of 31/12/2019
Source: Bloomberg, World Gold Council

Chart 6: Gold-backed ETFs (and similar) holdings*

Holdings (tonnes) Gold (US$oz)
3,000 1,900
1,700
2,500
1,500
2,000
1,300
1,500 1,100
900
1,000
700
500
500
0 300
2004 2006 2008 2010 2012 2014 2016 2018
North America Europe Asia
Other Gold, US$/oz

As of 31/12/2019
Source: Bloomberg, World Gold Council

Global gold-backed ETF flows | 2019 Summary 05

Notes
Gold-backed ETFs and similar products account for a significant part of the gold market, with institutional and individual
investors using them to implement many of their investment strategies. The data on this page tracks gold held in physical
form by open-ended ETFs and other products such as close-end funds, and mutual funds. Most funds included in this list
are fully backed by physical gold. While a few funds allow exposure to gold through other holdings such as cash or
derivatives, we only monitor those investing at least 90% through physical gold and appropriately adjust their reported
assets to estimate physical holdings only. Similarly, the data only estimates the corresponding gold holdings of ETFs that
include other precious metals For funds that include physical holdings of multiple precious metals, the data estimates only
the corresponding gold holdings contained within them.
Definitions
*Flows represent net creations or redemptions of shares of open-ended ETFs, or changes to the physical gold holdings
that back shares of closed-end funds or similar products over a given period. ETF flows in tonnes measure demand for
gold during a given period and generate the quarterly demand estimates reported in Gold Demand Trends. ETF flows in
US dollars estimate the monetary value of gold demand for a given period, taking into account daily fluctuations in the
price of gold. Holdings correspond to the total assets under management (AUM) of gold-backed ETFs and similar
products, measured in either tonnes or US dollars. Where tonnage holdings are not directly reported, we calculate these
by dividing the US dollar value of AUM by the LBMA Gold Price per tonne – where one tonne is equivalent to 32,150.7466
Troy ounces.
1
We regularly review the global gold-backed ETF universe and adjust the list of funds and holdings based on newly
available data and information. The recent review yielded a Swiss-based ETC UBS ETF Gold, which was not on the prior
list. This fund has been added and historical data on it has been updated; this yielded an increase of 44.9 tonnes of total
global holdings.
2
Note: We calculate gold-backed ETF flows both in ounces/tonnes of gold and in US dollars because these two metrics
are relevant in understanding funds’ performance. The change in tonnes gives a direct measure of how holdings evolve,
while the dollar value of flows is a finance industry standard that gives a perspective of how much investment reaches the
funds. There are some months where the reported flows measured in tonnes of gold and their dollar-value equivalent
seem inconsistent across regions. Both figures are correct. The disparity is due to the interaction between the
performance of the gold price intra-month, the direction and movement of the US dollar and the timing of the flows. For
example, hypothetically, if European funds were to experience outflows early in the month when the price of gold was
low but gained assets later in the month when the price of gold increased, and/or if the euro/dollar currency rate moved
meaningfully when there were flows, there might be a discrepancy between tonnage change and flows.
3
Low-cost US-based gold-backed ETFs are defined as exchange traded open-ended funds listed in the US, backed by
physical gold, with annual management fees of 20bps or less. At present, these include Aberdeen Physical Swiss Gold
Shares, SPDR® Gold MiniShares, Graniteshares Gold Trust, and Perth Mint Physical Gold ETF.
4
Net longs represent Money Manager and Other Net long positioning in the COMEX futures market.

Global gold-backed ETF flows | 2019 Summary 06

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Global gold-backed ETF flows | 2019 Summary 07