Hong Kong's first physically-backed gold ETF listed, Xu Zhengyu: It will help the growth and innovation of the gold market in Hong Kong.

Hang Seng Asset Management launched the Hang Seng Gold ETF (03170) today on the Hong Kong Stock Exchange (00388), making it the first ETF in Hong Kong that can be exchanged for physical gold at banks. Wilson Chan, Secretary for Financial Services and the Treasury of Hong Kong, stated at the listing ceremony that the product's launch is a significant support for Hong Kong to develop as an international gold trading center, and will contribute to the growth and innovation of the gold market in Hong Kong. The Hong Kong government has established the "Hong Kong Precious Metals Central Clearing System Limited", and the Treasury of Hong Kong will work with partners and the industry to promote its efficient development, ensure compliance with international standards, and promote greater trust, transparency, and innovation in the gold market. Wilson Chan said that the physical gold ETF combines the flexibility and liquidity of ETFs with the security of physical commodities, with trading and redemption taking place in Hong Kong. He also expressed optimism about the continuous financial innovation in Hong Kong. The product's distribution through licensed digital asset trading platforms will help connect traditional and digital finance, and explore new opportunities. This development aligns closely with the goal set out in the Chief Executive's Policy Address in 2025 to promote the construction of a world-class international gold trading market. He mentioned that in recent years, more and more sovereign and financial investors are seeking diversification in reserves and asset allocation, and the attributes of gold as a commodity, investment tool, and safe haven asset have further strengthened, driving the continuous appreciation of prices. He pointed out that in the third quarter of last year, global gold demand grew by 44% year-on-year, reaching a record high of $146 billion. Gold ETF holdings also rose significantly, increasing by 222 tons to over 3,800 tons this quarter, reflecting strong demand for gold from investors amid current geopolitical uncertainty and market volatility. Wilson Chan stated that the signing of a cooperation agreement with the Shanghai Gold Exchange this week is of milestone significance, laying a solid foundation for the integration of the Hong Kong Gold Central Clearing System with the mainland market, and jointly promoting a gold market that meets national standards, is trustworthy, highly transparent, and innovative. It is understood that the Hang Seng Gold ETF tracks the performance of the morning gold prices from the London Bullion Market Association (LBMA) (before fees and expenses) and offers investors the option to redeem physical gold at HANG SENG BANK. The processes for physical gold trading, gold storage, and physical redemption all take place in Hong Kong. The issuance price of this ETF is HK$16 per unit, with a trading quantity of 50 units per lot, equivalent to an investment amount of approximately HK$800 per lot, and a management fee of 0.25% per annum.