Gold ETC Launched by Tabula Experiences Heavy Redemptions, Loses 99.5% of Assets

Tabula-marketed $1.1bn gold ETC, SMO Physical Gold ETC, has been emptied of assets due to heavy redemptions, shedding around 99.5% of assets since 30 July. The fund peaked at $1.4bn in April and now has just $5.6m in assets. The outflows threaten the survival of the product, which was marketed for its "mine to vault" traceability and ESG focus.

A $1.1 billion gold exchange-traded commodity (ETC) distributed by Tabula Investment Management, the SMO Physical Gold ETC (BARS), has been emptied of assets due to heavy redemptions. The fund, which peaked at $1.4 billion in assets under management (AUM) in April, now has just $5.6 million in assets, according to figures from Trackinsight [2]. The outflows, which have shed around 99.5% of assets since July 30, threaten the survival of the product.

The SMO Physical Gold ETC was marketed for its "mine to vault" traceability and ESG focus, which resonated with gold-hungry, ESG-focused investors. However, the fund has been rocked by large, abrupt redemptions, which could be attributable to a single client, though Tabula, now part of Janus Henderson, declined to comment [2].

The dramatic outflows contrast with the positive flows experienced by the fund's largest competitors in the space, which have all enjoyed positive flows in the last month, according to Trackinsight figures [2]. Gold is currently trading at $3,338 per ounce, a little below record highs.

The SMO Physical Gold ETC's woes highlight the challenges faced by gold ETCs in the market. While the fund's early traction was driven by the continued bull market in gold and its differentiated ESG profile, the abrupt redemptions suggest that investor sentiment has shifted.

References:
[1] https://www.moomoo.com/news/post/50505270/record-tr4cking-news-wall-street-forecasters-keep-raising-the-s-p-500-s
[2] https://www.etfstream.com/articles/tabula-marketed-usd1bn-gold-etc-emptied-by-huge-redemptions