Exchange Traded Commodities track the price of single assets, with 100% physical backing.
Single asset exposure can be attractive. By using an ETC structure, with 100% physical backing by the underlying commodity, it is possible to track the price of individual assets.
From physical gold, as a store of value and hedge against economic turmoil, to physical carbon EUAs being withheld from industrial polluters, exchange traded commodities can be used in manifold ways.
ETCs differ from ETFs in that they can track just one single asset, whilst an ETF requires a diversified set of holdings for its portfolio, and cannot hold physical commodities. Whilst this can pose increased risk for ETCs, the allows investors to gain exposure to a specific asset of their choice, along with all the usual benefits an ETF.
Due to exchange traded commodities being 100% physically backed by the asset they track, it allows some of them to be physically redeemed.
100% Physical Backing
Each of the exchange traded commodities are 100% physically backed by the underlying asset, which means they can be used as a proxy for holding the commodity itself.
Physical Redemption Opportunity
The nature of physical backing allows, in some cases, for physical redemption of the underlying commodity.
Scarcity Value
Physical commodities are usually finite, which can drive scarcity value when there is a shortage, and especially when demand increases.
Key Risks
Exchange traded commodities are for professional investors only. When you invest in ETCs your capital is at risk.
Sustainability is increasingly important to our investors, and the precious metals investment business is at the forefront of The Royal Mint’s sustainable strategy.
According to research conducted by HANetf, RMAU is the only gold-backed ETF that includes recycled gold in its holdings.
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