Caixin News Agency, November 5th (Reporter: Zhou Xiaoya) Multiple gold etf fund shares reached a new high, with another gold etf announcing a fee reduction.

On November 5th, ICBC Credit Suisse Fund announced that, starting today, it will reduce the management fees and custody fees of ICBC Credit Suisse gold etf and its connected funds. Specifically, the adjusted management annual fee rate and custody annual fee rate for the two products are 0.15% and 0.05% respectively.

This is another gold etf fund that announced a fee reduction after the Huaxia Gold ETF. It is worth noting that, as of now, the difference in size between these two products is less than 0.1 billion yuan, and after the fee reduction, the fee levels of the two products are equivalent.

Since September, funds have once again flowed into gold etf, with the 7 ETFs linked to SGE Gold 9999 receiving net purchase shares exceeding 2.3 billion units since September, and the scale increasing to 66.586 billion yuan. These 7 products all set new highs in fund shares yesterday.

Looking ahead, some fund managers analyze that with many important events intensifying, market competition will become more fierce. Gold may face some resistance. However, the complexity of geopolitical factors and the increased uncertainty facing the global economy may enhance the attractiveness of gold as a safe haven asset.

The second gold-themed ETF to lower fees recently

Regarding this fee reduction, ICBC Credit Suisse Fund stated that it is to better meet the investment and financial management needs of the majority of investors and reduce the financial management costs for investors. After the fee reduction for ICBC Credit Suisse gold etf and its connected funds, the fee levels of the two products are reduced to the lowest level among similar products.

In fact, as early as three weeks before the fee reduction of ICBC Credit Suisse Gold ETF and its feeder fund, Huaxia Gold ETF also announced a reduction in fees. Currently, among the 7 ETFs linked to SGE Gold 9999, only ICBC Credit Suisse Gold ETF and Huaxia Gold ETF have adopted a low fee level of "management fee rate of 0.15%, custodian fee rate of 0.05%", while the rest still maintain "management fee rate of 0.5%, custodian fee rate of 0.1%".

As of November 4, the total scale of these 7 gold-themed ETFs is 66.586 billion yuan, with ICBC Credit Suisse Gold ETF at 0.997 billion yuan, ranking 6th, while Huaxia Gold ETF ranks 5th with a scale of 1.068 billion yuan.

Multiple gold ETF shares hit record highs.

As gold ETFs successively reduce fees, funds have once again flowed into gold ETFs recently. The total amount of fund shares of ICBC Credit Suisse Gold ETF reached a record high of 0.167 billion as of November 4, with a significant increase in fund shares since September. Data shows an increase of 0.101 billion fund shares since early September.

The fund's scale once exceeded 1 billion yuan mark, but has now dropped to 0.997 billion yuan.

Overall, all 7 ETFs linked to SGE Gold 9999 have maintained net subscriptions since September. As of November 4, a total of 2.363 billion shares have been net subscribed, with a total scale of 66.586 billion yuan.

As the ETF with the largest scale linked to this index, Huaan Gold ETF also reached a new high of 4.813 billion shares on November 4, with the scale increasing to 28.888 billion yuan. The ETF has seen net subscriptions of 0.538 billion shares since September.

ETFs such as E Fund Gold ETF and Bosera Gold ETF, which have received net subscriptions exceeding 0.5 billion shares, also reached new highs in fund shares as of November 4, with total shares reaching 2.286 billion and 2.7 billion respectively, and fund scales increasing to 13.58 billion yuan and 14.054 billion yuan. In addition, the total fund shares of gold ETFs under Guangfa Fund, Huaxia Fund, and Qianhai Kaiyuan Fund also reached new highs on November 4.

Recently, the World Gold Council released the "Review and Trend Analysis of the Chinese Gold Market in the Third Quarter of 2024", mentioning that the gold price was strong in July and September at times, attracting fund inflows, but was not able to fully offset the outflow in August. In the third quarter of this year, the Chinese market saw outflows of approximately 0.52 billion RMB (about 1 ton) in gold ETFs, ending the inflow trend of the previous four consecutive quarters.

However, the total asset under management of gold ETFs in the Chinese market increased by 8% due to strong gold prices, reaching 55 billion RMB (7.8 billion USD), setting a new historical high.

Investment opportunities nearing the U.S. election

From the fund's performance perspective, the above-mentioned gold ETF had a net asset value increase of over 8% in the third quarter, continuing the growth trend since the fourth quarter, and has risen by over 4% as of now.

Behind the continued rise, the manager of HuaAn Gold ETF Fund, mentioned in the third-quarter report of the ETF, that gold's good performance is based on three major factors. First, the Fed's rate cut in September was implemented, with potential for a continued rate cut cycle in the future, overseas currency environment being loose, U.S. bond rates and the overall trend of the dollar are declining, which has a relatively positive impact on gold. Second, under the impact of de-dollarization, overseas central banks continue to buy gold. Third, with the escalation of global geopolitical conflicts and increased uncertainty in major asset classes, gold has significant allocation value.

"In the long run, the United States is currently facing the dual pressures of high debt and high interest rates, which will further burden the U.S. finances and affect the credibility of the dollar." In his view, as a response, the necessity of allocating gold is increasing.

"Looking ahead at the current situation, there may be divergences in the specific implementation path of the Fed’s rate cut, but from the dot plot in September, the median policy rate for 2026 is 3.1%." Former manager of HaiKaiYuan Gold ETF Fund, Liang PuSen and Kong Fang, also believe that there is still significant room for the U.S. policy rate target to fall below the long-term rate.

Looking at historical data, apart from the slight 0.59% drop in international gold prices at the beginning of the rate-cut cycle that started in September 1998, international gold prices have achieved good increases between the first rate cut and the last rate cut in other rate-cut cycles.

In addition, according to the Congressional Budget Office (CBO) report "Budget and Economic Outlook: 2024 to 2034", the total U.S. deficit will increase from $1.6 trillion in fiscal year 2024 to $2.6 trillion in 2034, with a compound annual growth rate of approximately 4.97%, significantly higher than the average growth rate of about 3.7% from 1974 to 2023. "In this situation, the depreciation of the U.S. dollar and inflation also help lift the central price of gold," they said.

Looking at the medium to long term, they also mentioned that geopolitical factors remain complex, and the global economy faces uncertainty, with holding gold having some insurance attributes.

Invesco Fund's latest analysis points out that this week the U.S. election results will be announced, followed by the U.S. Federal Reserve interest rate meeting. With many important events looming, the market's game will become more intense. The strengthening of the U.S. dollar and potential tightening of monetary policy may ultimately bring some resistance to gold. However, escalating trade tensions may increase the attractiveness of gold as a safe-haven asset.