ETF Securities has launched a gold backed ETC on the London Stock Exchange.
The ETFS Physical Swiss Gold is 100% backed by allocated physical gold bullion that meets London Bullion Market Association (LBMA) good delivery standards. The gold is held in vaults in Zurich, Switzerland.
The security is designed to return the spot price of gold, less fees, which is referenced against a daily fixing price issued by LBMA.
The firm says shares can only be issued when bullion is delivered into the trust account at the custodian's vault, which has an appointed trustee to approve all deposits and withdrawals of bullion.
The security will also undergo a bi-annual inspection, performed by an independent external auditor.
ETFS global head of sales and marketing Hector McNeil says: "Investors have been asking us for a long time to develop a product that stores its gold in Switzerland in addition to our current gold ETF which stores its gold in London."
He adds investors are uncomfortable with bullion that is not of the LBMA standard and are reluctant to take on risks inherent in unstamped bullion.
ETFS has over $11bn of assets under management in physically backed gold bullion products globally, as of December.
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