As investors increasingly turn to gold as a safe haven investment, Lyxor has launched a new gol...
As investors increasingly turn to gold as a safe haven investment, Lyxor has launched a new gold exchange traded note.
The Lyxor ETN Long Gold will track in real time the performance of the gold spot price quoted in US dollars per troy ounce.
Lyxor ETNs are secured notes guaranteed by Société Générale and 100% collateralised with S&P AAAf-rated euro government bond funds or government bonds from the eurozone, which eliminates the counterparty risk on the issuer.
The ETN has a fixed annual fee of 0.3% and a variable cost to finance the collateral used in the underlying structure, which is disclosed on a daily basis.
Lyxor ETN Long Gold will be eligible for capital gains tax (CGT) treatment in the UK.
Global head of Lyxor ETFs Dan Draper comments: "This is Lyxor's first ETN to be launched. While ETCs and ETNs both use notes, the term ETN is more established globally. Our aim is to be as transparent as possible - we want people to be aware of the structure."
In line with Lyxor's launch, the LSE has opened a new segment for listing ETNs for the first time.
The launch also marks the first ETN to put collateral in an ETN format, according to Draper. He explains that the European Ucits III directive includes a diversification qualification, which stipulates that the underlying investments in a fund must comprise no less than five components. As gold constitutes only one underlying, it does not qualify for an ETF.
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