Tabula: ESG is key as institutional investors back gold ETPs and metals funds

Tabula: ESG is key as institutional investors back gold ETPs and metals funds

May 14, 2024

Commodities ESG
Duurzaam (24) ESG

Gold ETPs and metals funds will benefit the most from positive flows into the commodities sector this year, with an ESG focus crucial to maximising inflows, research from European ETF provider Tabula Investment Management Limited ('Tabula') shows.

The study by Tabula found 84% of professional investors (pension funds, insurers, family offices and wealth managers) expect positive flows into the almost US$90 billion European-listed physical gold ETP sector this year. Around 17% of those asked expect these flows to be 'strong'.

The attraction of metals for diversification is the main reason for increased allocations according to 61% of investors, while 48% say increased competition is driving interest. Around 44% point to an increased focus on sustainability and ethical sourcing.

The research of 200 gold investors at European pension funds, wealth managers, insurers and family offices, responsible for over €800 billion in assets under management, showed strong optimism about allocations to metals investment vehicles in general over the next two years.

Around 67% of investors questioned in the UK, Germany, Switzerland, France, Italy and the Nordics predict dramatic increases in allocations to funds focusing on metals and metal miners, while 41% predict dramatic increases in allocations to physical commodity exchange-traded products.

The study for Tabula, which recently announced the launch of an ESG-focused physical gold ETC, the SMO Physical Gold ETC (Bloomberg: BARS LN), found the key factor for investors allocating to a new gold ETC is its ESG focus. The ability for investor to trace where the gold in an ETC has come from ranks ahead of product fees or whether it offers physical or derivative exposure.

Related posts