Tabula Investment Management has launched its first non-fixed income ETF, a gold exchange-traded commodity (ETC) that adheres to certain responsibility standards.
The SMO Physical Gold ETC (BARS) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.29%.
BARS is the first gold ETC to offer full traceability of gold bars from mine to vault.
Tabula has partnered with Single Mine Origin (SMO), a company that conducts due diligence on miners, to ensure each gold bar is extracted from mines that adhere to ESG standards.
Each mine is independently audited and must demonstrate they provide social, environmental and cultural support to local communities.
To be owned by BARS, gold must not be of Russian origin, must not be recycled gold of unknown provenance and mercury must not be used in its extraction.
BARS will track the LBMA Gold PM Fixing and HSBC will provide custody.
Michael John Lytle (pictured), CEO of Tabula, commented: “Gold production is highly fragmented with multiple countries, companies and mines producing the precious metal. Quality control has historically focused on ensuring purity of the metal in the bars.
“However, with only 4% of gold being traceable there are serious ESG risks in the gold supply chain from potential human rights abuses, environmental degradation, possible financing of conflict and terrorism, money laundering and sanctions evasion.”
Charlie Betts, co-founder of SMO, added: “The only way to properly assess the social and environmental impacts of gold is to have full traceability across the supply chain. Proper accountability is not possible without this degree of transparency.”
BARS has a higher fee than the cheapest gold ETCs available in Europe. The Xtrackers EI Physical Gold ETC Securities (XGDU) carries a TER of 0.11%, the lowest fee on the continent.
The Royal Mint Responsibility Sourced Physical Gold ETC (RMAU) is another gold ‘ESG’ ETC available to European investors.
RMAU offers exposure to LMBA post-2019 good delivery bars and is partially backed by 100% recycled gold bars which are “far less carbon-intensive than mined gold”, according to HANetf.
