Exchange traded gold products

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Exchange-traded gold products are various forms of investment for using gold as an investment . Essentially, these are exchange-traded funds (ETF) and certificates ; Exchange-traded commodities (ETC) are a special form of certificates that are usually considered separately . Closed funds are not included. A characteristic of these financial products is that they can be traded on each exchange . Some stock exchanges have specialized in trading ETFs in particular.

Basically, the products can be classified according to the proportion of physical gold backing . Purely synthetic papers only show the gold price .

Exchange traded funds

Exchange-traded funds (ETF) are - like all investment funds - special assets . In the event of the insolvency of the investment company, the fund's property is retained for the shareholders.

The advantages of exchange-traded funds are the generally high market liquidity and low costs. Since these are almost exclusively passive financial products that do not require active fund management, the fees are usually lower than for actively managed funds. This also applies to precious metal ETFs. Since ETFs are traded on different stock exchanges, new market prices are created over the entire trading day or these are set by a market administrator. Thus, the price of a gold ETF should almost exactly track the market price for gold.

Special features in the German market

One hurdle for gold ETFs in Germany is approval for public distribution: in order to be approved for public distribution, the Investment Act only allows funds to invest up to a maximum of 30 percent of the fund volume in a single investment. Purely physical gold ETFs naturally exceed this limit, as they invest the fund holdings completely in physical gold. Classic gold ETFs such as SPDR Gold Shares and ZKB Gold are therefore not approved for public distribution in Germany.

Certificates

Certificates are bearer bonds and are therefore subject to a solvency risk for the respective issuer. There is no clear distinction between gold certificates in the narrower sense and the special sub-form of gold ETC (Exchange Traded Commodities); ETCs are more often backed with physical gold, while certificates usually use derivative components to track their performance. Certificates are also usually issued directly by commercial banks, while ETCs are usually issued by an independent issuing vehicle.

Thanks to the derivative structure, certificates can also be equipped with leverage, guarantee protection or currency hedging.

Exchange Traded Commodities

Although the name - probably for marketing reasons - is very reminiscent of ETFs, exchange-traded commodities (ETC) are not funds, but certificates in the form of bearer bonds . This means that the fund's assets are not a special fund; rather, the investors buy a right from the issuer of the security. Partially gold ETC are with vaulted gold covered.

The most important ETCs on gold that are traded in Germany are by assets under management:

  • Xetra-Gold , issued by Deutsche Börse Commodities
  • ETFS Physical Gold, issuer is ETF Securities
  • Invesco Physical Gold A, issuer is Invesco Physical Markets PLC
  • iShares Physical Gold ETC, issuer is iShares Physical Metals PLC, BlackRock
  • Gold Bullion Securities, issued by ETF Securities
  • DB Physical Gold ETC Euro Hedged, issuer is Deutsche Bank
  • ETFS Physical Swiss Gold, issuer is ETF Securities
  • EUWAX Gold, the issuer is Boerse Stuttgart Securities
  • EUWAX Gold II, the issuer is Boerse Stuttgart Securities

In 2011 the turnover of the six largest gold ETCs in Germany was over 6.5 billion euros.

Taxation in Germany

As a financial product, exchange-traded funds and certificates are subject to German flat-rate withholding tax . This means that a German investor has to pay 25% tax on profits from an investment in a gold product traded on the stock exchange (plus solidarity surcharge and possibly church tax). Losses can be offset against profits from other investments. According to a ruling by the Federal Fiscal Court in October 2015 (Ref .: VIII R 4/15 and VIII R 35/14), Xetra-Gold is an exchange-traded commodity. In terms of tax, it is classified in the same way as coins and bars made of physical gold. This means that capital gains are not subject to capital gains tax. Exchange rate gains that are realized within the twelve-month speculation period are subject to the personal tax rate.

Individual evidence

  1. ↑ Tobias Bürger: Gold im Sondergeld , Part II. In: portfolio institutionell of February 14, 2012.
  2. ^ Anton Riedl: Certificates against Coins Gold Investment in a self-experiment in Wirtschaftswoche dated February 3, 2010.
  3. ↑ ETCs on Gold , In: justetf.com accessed January 8, 2019.
  4. ↑ ETF sales on the German stock exchange decline by almost eight percent , In: Extra-funds.de of March 13, 2012.
  5. ↑ http://www.n-tv.de/ratgeber/Bundesfinanzhof-entscheidet-fuer-Anleger-article16144896.html