Hong Kong's first ETF to offer investors access to global gold mining companies and provide exposure to gold deposits worth US$900bn

Enhanced Investment Products Limited
2016-11-18 12:00 3145

HONG KONG, Nov. 18, 2016 /PRNewswire/ -- Today, Enhanced Investment Products Limited's (EIP) exchange traded funds (ETF) business "XIE Shares" launches the XIE Shares FTSE Gold Miners ETF (3116.HK) ("The Gold Miners ETF") on the Hong Kong Exchange (HKEx). The Gold Miners ETF provides investors a cost effective way to gain exposure to global gold deposits worth US$900bn.1



The Gold Miners ETF invests in a basket of physical equities and replicates the FTSE Gold Mines Net Tax Index, which currently represents 35 global gold mining companies that produce a minimum of 300,000 ounces of gold per year. Some of the notable countries represented in the ETF include Canada, US, South Africa, and Australia.  

The Gold Miners ETF meets increasing investor demand for gold investing in light of a loss in confidence in paper money, caused by the increasing debt of developed countries. Through systematic quantitative easing programmes, major central banks have pumped US$13.5tn2 into the global economy since the financial crisis in 2008. This debt, and recent political events such as Brexit and the US elections, point to more volatility and uncertainty in financial markets. Gold provides a hedge against inflation or deflation and is a store of value. 

EIP's CEO Tobias Bland explains:  "EIP is delighted to launch the first Gold Miners ETF in Hong Kong. This new product, the first of its kind on the HKEx, will enable retail and institutional investors to capitalize on gold price fluctuations through the ownership of gold mining stocks, which tend to go up and down more than the price of gold, given the size of their gold deposits relative to their market capitalization. This year, gold mining stocks are outperforming physical gold by approximately 50%."

Gold is a long-term theme promoted by CLSA's Global Equity Strategist Chris Wood who believes that quantitative easing and declining confidence in central banks will lead to devaluation in paper money and a rise in the gold price, as investors seek a long-term safe haven.

CLSA Chairman and CEO Jonathan Slone comments: "CLSA is excited to bring ETF solutions to the market that expresses the firm's research themes through our partner, Enhanced Investment Products Limited. Current political and global sentiment coupled with the actions of central banks increases the need for non-correlated assets. The Gold Miners ETF offers investors a cost effective solution to diversify their investments."

Sudir Raju, Managing Director ETP Relationships, Asia, FTSE Russell said: "We are pleased that XIE Shares has decided to licence the FTSE Gold Mines Net Tax Index for its new ETF, the first to be tracking this index. FTSE Russell works closely with a number of firms in the Asia region and has a strong track record in developing a broad range of indexes and services across asset classes, which are suitable for benchmarking purposes and as tools in the creation of a wide variety of financial products, such as exchange traded funds."

The Gold Miners ETF is the third ETF to launch following CLSA's investment into EIP's "XIE Shares" Exchange Traded Funds business in September 2014. In April 2015, XIE Shares FTSE Chimerica ETF (3161.HK) launched as the first pure-play ETF to access Chinese New Economy stocks listed in America. In November 2015, XIE Shares CLSA GARY ETF (3102.HK) launched to provide investors with access to Asian companies with competitive yield, growth, and debt profiles. The CLSA GARY ETF is based on CLSA's award winning micro-strategy research.    

1Bloomberg and Company Annual Reports, 2015.

2Bloomberg, Nov 2016.

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Enhanced Investment Products Limited ("EIP") was established in 2002 and is a Hong Kong-based investment management firm focussing on the Asia-Pacific region. In 2012 EIP launched its ETF platform, XIE Shares.

In 2014, CLSA Hong Kong Holdings Limited ("CLSA") acquired 49% of the XIE Shares Hong Kong ETF platform. Under the new partnership, EIP can widen its distribution network with the involvement of CLSA and the broker network of CLSA's Parent, CITIC Securities.

About CLSA Limited

CLSA is Asia's leading and longest running brokerage and investment group. The company provides equity broking, corporate finance & capital markets and asset management services to global corporate and institutional clients.

Renowned for service excellence, product innovation and award-winning market intelligence CLSA has provided independent equity research, sales and trading since 1986. CLSA is the largest agency-only brokerage in Asia and with exchange membership in every developed market in the region, plus Australia and the Americas, CLSA provides best execution across a range of products and services.

Through CITIC CLSA Securities, the group's corporate finance and capital markets team leads equity public offerings (primary and secondary), debt issuances and M&A advisory.  Direct investment is offered through diversified, alternative investment vehicles by CLSA Capital Partners.

Headquartered in Hong Kong, CLSA's 1,500 dedicated professionals operate from 25 cities across Asia, Australia, the Americas and Europe. CLSA's parent company CITIC Securities is China's leading investment bank.  

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Source: Enhanced Investment Products Limited