Daily ETF Watch: Merk Gold ETF Launches

Axel Merk’s first ETF, a gold bullion fund with a twist, is finally live.

Axel Merk’s first ETF, a gold bullion fund with a twist, is finally live.

The Merk Gold Trust, currency expert Axel Merk’s proposed riff on existing physical gold ETFs, is launching today on the NYSE Arca under the ticker “OUNZ,” according to an NYSE communique.

The fund, which allows smaller retail investors to redeem their shares for physical gold, will compete with well-established funds, including the SPDR Gold Shares (GLD | A-100) and the iShares Gold Trust (IAU | A-74).

In comparison, physical redemptions in gold bullion ETFs such as GLD have been limited to authorized participants in lots of 100,000 shares, which is $12.5 million worth of gold bars at GLD’s current price of $126 a share.

Gold is widely viewed as a hedge against inflation and as a safe haven, and while the S&P 500 Index reaches new highs and the U.S. economy appears to be slowly recovering, investors would be wise to keep an eye on the yellow metal. Gold, after all, has appreciated more than 8 percent year-to-date, beating the S&P’s 2.1 percent rise.

The Merk Gold Trust comes with an annual fee of 0.40 percent, or $40 for every $10,000, according to the firm’s website. That’s the same price as GLD, though iShares’ IAU comes in at 0.25 percent.

Filing

It only took it four years, but Exchange Traded Spreads Trust, or ETSpreads, a San Francisco-based fund company that has a number of ETFs in the works related to credit default swaps, has updated regulatory paperwork on four credit-default-swap-related ETFS, signaling that these funds may soon see the light of day.

The new family of proposed CDS ETFs from ETSpreads will allow U.S. investors to weigh in on corporations’ credit quality on both the long and short side at a time when the outlook for interest rates looks to trend higher as the Federal Reserve continues to taper its bond-buying program.

The proposed ETFs include:

1. ETSPREADS IG LONG CREDIT FUND (IGCL)
2. ETSPREADS IG SHORT CREDIT FUND (IGCS)
3. ETSPREADS HY LONG CREDIT FUND (HYCL)
4. ETSPREADS HY SHORT CREDIT FUND (HYCS)

IGCL and IGCS have expense ratios of 0.30 percent, or $30 for every $10,000 invested, while HYCL and HYCS will charge 0.50 percent.

But ETSpreads is not alone on this endeavor.

Bethesda, Md.-based ProShares recently got the nod from regulators to offer a more ambitious portfolio of eight ETF strategies designed around CDSs, including four long and short pairs of U.S.-listed funds that target high-yield and investment-grade debt credit CDSs in both North America and Europe.

ProShare’s proposed offerings include the:

1. ProShares CDS Long North American HY Credit ETF
2. ProShares CDS Short North American HY Credit ETF
3. ProShares CDS Long North American IG Credit ETF
4. ProShares CDS Short North American IG Credit ETF
5. ProShares CDS Long European HY Credit ETF
6. ProShares CDS Short European HY Credit ETF
7. ProShares CDS Long European IG Credit ETF
8. ProShares CDS Short European IG Credit ETF