Franklin Templeton Launches Responsibly Sourced Gold ETF — Commodity Comment
By Robb M. Stewart
Franklin Templeton has launched what it says is a responsibly-sourced gold exchange-traded fund for investors who continue to seek the precious metal’s historically low correlation to traditional stocks and bonds, while also investing in gold that meets certain internationally recognized ethical standards.
On the ETF:
Franklin Templeton, a subsidiary of Franklin Resources Inc., said it launched the Franklin Responsibly Sourced Gold, which aims to reflect the performance of the price of gold bullion, less the expense of fund operations, and is priced at 15 basis points. The shares will trade on NYSE Arca.
The ETF is an option for investors looking to add gold investments to their portfolios, participating in the physical gold market “with the added peace of mind of knowing that this gold is responsibly sourced,” said David Mann, head of global ETFs capital markets.
Franklin Templeton, whose U.S. ETF platform had more than $12 billion in assets under management as of May 31, said the fund defines responsibly sourced gold as London Good Delivery gold bullion bars that were refined on or after Jan. 1, 2012, and have been refined in accordance with London Bullion Market Association’s responsible gold guidance that establishes minimum requirements that are mandatory along the entire gold supply chain for refiners. The program requires approved refiners demonstrate their efforts to respect the environment globally and combat money laundering, terrorist financing and human rights abuses.
The fund doesn’t use any hedging techniques to attempt to reduce the risks of losses resulting from gold price decreases, and is a passive investment vehicle so doesn’t manage its portfolio to sell gold bullion at times when its price is high or to acquire gold bullion at low prices in the expectation of future price increases, Franklin Templeton said.
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