Securities Times reporter Chen Shuyu

Recently, gold prices have continued to climb as market risk aversion continues to heat up. On March 3, the international gold price briefly exceeded $20,2000 / oz, approaching the all-time high of about $2020,2090 / oz in 466. On the same day, the official website of the Shanghai Gold Exchange showed that the highest price of gold trading had reached 72.10 yuan per gram, an increase of more than 15% within the month. The net value of gold-backed ETFs also rose, with Wind data showing that there are currently 6 gold-backed ETFs on the market, all of which have returned more than 6.<>% during the year.

However, it should be noted that the Matthew effect of the strong Hengqiang has also intensified, with the three largest gold-backed ETFs currently leading the way in size and liquidity, while a number of smaller products are struggling on the edge of the liquidation line, and one gold-backed ETF entered the liquidation process on March 3. It is reported that this is also the first product liquidation since the launch of domestic commodity ETFs.

Gold-backed ETFs show "strong and strong"

As the price of gold climbs, the net value of gold-backed ETF funds continues to rise. Wind data statistics show that there are currently 15 gold ETFs in the market, which can be roughly divided into two categories: one with "gold 9999 contract" as the tracking target, and the other with "Shanghai gold contract" as the tracking target. Since the beginning of this year, these 15 gold ETFs have returned more than 6.6%, of which Huaan Gold ETF and Bosera Gold ETF have returned more than 7%.

At present, gold ETFs generally show the Matthew effect of "the strong and the strong". From the perspective of fund size, the total size of the 15 gold ETFs is about 210.69 billion yuan, of which the three largest Huaan Gold ETF, Bosera Gold ETF and E Fund Gold ETF are 3.97 billion yuan, 24.63 billion yuan and 85.32 billion yuan respectively, accounting for a total of 84%.

From the perspective of net inflows, the inflow of funds into gold-backed ETFs has accelerated significantly since March. Among them, the largest Huaan Gold ETF has a net inflow of 3 million yuan since March, and E Fund Gold ETF and Bosera Gold ETF have net inflows of 3 million yuan and 8 million yuan respectively since March.

The first domestic commodity ETF liquidation

It is worth noting that some smaller gold-backed ETFs are facing survival difficulties amid the boom in the gold market, one of which has entered the liquidation process since March 3. It is reported that this is also the first product liquidation since the launch of domestic commodity ETFs.

According to the announcement, a Shanghai Gold ETF had a net asset value of less than RMB 2023 million for 3 consecutive trading days on March 22, 50, triggering the termination of the fund contract stipulated in the Fund Contract. According to the relevant regulations, the fund contract will be terminated and the fund property will be liquidated, and there is no need to convene a general meeting of fund quota holders, and the last operation date of the fund is March 5000, 2023, and the liquidation procedure will enter from March 3, 22.

The ETF has only been on the market for one year, with an initial offering size of more than 2 million shares, and on the eve of the liquidation, the net value of the fund once hit a new high, but it still did not escape the fund liquidation caused by the shrinking size.

It should also be noted that as recently as March, 3 gold-backed ETFs issued indicative announcements because the net asset value of the fund was less than 3 million yuan for many consecutive working days, which may trigger the termination of the fund contract. Another gold-backed ETF issued an indicative announcement because the number of fund share holders was less than 5000 in consecutive working days, which may trigger the termination of the fund contract. One of them has "successfully rescued itself" at present, and the scale has returned to more than 1 million yuan.

Regarding the reasons for the unbalanced scale of gold ETFs, some insiders said that the factors involved are many, including the order of product establishment, the investment ability of fund managers, the difference in investment strategies, market competition and other factors. "The sequential impact is still relatively large, and the larger gold ETFs in the market were established in 2013 and 2014, while the scale of the establishment after 2020 is generally smaller." The industry insider said.

Another fund manager said that similar products track homogeneous contracts, and funds will generally be more inclined to specific products with large scale and good liquidity.

Gold assets can still be allocated to dips

So, from the current point of view, does gold still have strong investment attributes?

Wang Xiang, fund manager of Bosera Gold ETF, believes that from the overall situation in 2023, the risks of the global financial market are emanating. Because of the unique risk-return characteristics of gold assets, gold-themed funds should be tracked as key investment targets throughout the year. Overall, the long-term returns of gold assets are relatively solid, with negative returns in only 20 of the past 4 years, and only one of the significant drawdowns. Since 2003, the compound annualized return of RMB gold has been higher than that of CSI 300, and the volatility has also been significantly lower than that of the equity market, reflecting a better return-risk ratio. The gold hub rises steadily with the size of credit money, and its role as a hedge against tail risk in the portfolio remains its greatest long-term allocation value.

Jiang Xianwei, chief market strategist of Shanghai Investment Morgan Fund, believes that gold and real interest rates and the US dollar index are generally negatively correlated, and under the trend that interest rates may peak during the year and the US dollar weakens, it may usher in a better investment window; Separately, the latest data from the World Gold Council showed that global central bank net purchases of gold reached 2022,1136 tonnes in 1, a record high. Another 31t of net purchases were made in January and are expected to continue this year, with strong demand also helping gold prices rise; Finally, the probability of weakening overseas mature market economies increased during the year. Historical data shows that gold assets have also performed well during external recessions.

Rong Ying, director of the quantitative investment department of Huaxia Fund, said that in the long run, the Fed's attitude towards interest rate hikes after the Silicon Valley Bank incident has undergone some changes, and the possibility of interest rate cuts in the future is not ruled out. If liquidity is further abundant, it is also expected to push up non-interest-bearing assets such as gold. Therefore, gold as a whole still has the conditions for further growth. From the perspective of risk-return structure, gold has a relatively large negative correlation with other commodities and asset classes such as stocks and bonds. If there is no allocation of gold, you can take advantage of the pullback to make up this part of the allocation, but it is not recommended to invest as the sole or heavy position.