Demand for gold exchange traded funds (ETFs) is expected to increase in 2017 amidst growing geopolitical volatility and continuing need for safe haven assets and diversification.

 

“Political shifts in the UK, US and most recently in Italy are sending the world into uncharted waters. The recent retreat in gold price may present a good entry point to investors, given the uncertainty stemming from next year’s elections in a number of major European countries,” says William Chow, managing director, ETF Business of Value Partners.

 

Compared with paper gold and physical gold, gold ETF tracks gold price performance while foregoing the hassles of holding physical gold and the concern on trading liquidity. Currently, there are three gold ETFs listed in Hong Kong.

 

Launched in 2010, Value Gold ETF is the only ETF backed by physical gold stored in Hong Kong, making it less susceptible to geopolitical risks given Hong Kong’s relatively stable status as compared to other overseas locations. This is one of the eight ETFs launched by Value Partners under the brand of Value ETF since 2009.

 

Globally, there is also an increasing demand for ETFs as financial advisors are putting more focus on cost efficiency of funds.

 

“ETFs have been playing an increasingly important role in long-term investment and retirement planning in the US and European markets, and this is likely to impact Asia gradually,” Chow say.

 

“We look forward to more catalysts to the development of ETFs in the Hong Kong market, such as ETF Connect between China and Hong Kong in 2017. As the leading home-grown asset management firm in Hong Kong, Value Partners has been keen in educating investors about the benefits of using ETFs, and we will continue to introduce new products and initiatives in demand.”

 

Value Partners announced that effective December 6, it will lower the management fee of its flagship gold product - Value Gold ETF - to 0% from 0.15% per annum until June 30 2017.