Each unit of an ETF is a security that represents equity ownership in a fund or trust that in turn holds physical gold with a bank or other depository. The fund or trust charges owners an annual fee to cover management, storage, marketing and administrative costs. Final beneficial owners do not directly own the underlying physical assets held by the fund or trust and - in most circumstances - cannot take physical delivery of their metal.
VaultChain™ Gold is owned directly by the final beneficiary, whose metal is stored on a bailor-bailee basis with the Royal Canadian Mint and recorded on VaultChain™’s blockchain database; there is no trust or fund wrapper, which eliminates the associated management and administrative fees. The underlying assets are deliverable at the request of the final beneficiary(ies) through participating dealers.
This example shows how fees degrade the value of traditional gold investments through time.Inputs: 5 year investment period comparing VaultChain™ Gold with alternatives incorporating cost of acquisition and cost of carry. Assumes VaultChain™ Gold cost of acquisition at 15 bps.
Value lost to fees*
- Gold Bars: estimated trade execution fees, estimated casting and other fees
- GLD ETF: prospectus, estimated trade execution fees
- VaultChain™ Gold: estimated 15 bps cost of acquisition
|Gold Bars||GLD||VaultChain™ Gold|
|Cost of Acquisition||3-5%||Low||Low|
|Annual Cost of Carry||20-100 bps||40 bps||Low|
*Cost estimates inclusive of explicit transaction charges, implicit spread, allocation, location swaps and other fees associated with physical gold.