ETF Securities has added another gold tracker to its stable with the launch of the ETFS Physical Swiss Gold ETC on the London Stock Exchange today (16 December).

The new ETC will have the ticker SGBS and will carry a management fee of 0.39% per annum.

SGBS will be backed by physical allocated metal stored in secure vaults in Zurich, Switzerland on behalf of the custodian, JPMorgan Chase Bank, N.A. All physical gold held by the custodian will conform to the London Bullion Market Association’s (LBMA) rules for Good Delivery. ETF Securities claims that this will be the only Swiss-vaulted exchange-traded product that meets LBMA standards.

A bi-annual inspection of gold holdings by an external auditor will take place and all gold bar identification numbers will be published on the ETF Securities website.

ETF Securities currently manages over US$11 billion in physically backed precious metals ETCs, according to the company’s press release. This represents around two-thirds of the firm’s overall assets under management.

The move to offer a gold bullion tracker with metal storage in Switzerland will be seen as a response to the demand from certain bullion investors to hold metal in what they perceive to be a safer jurisdiction than London or New York. It will also provide competition to the Swiss-based gold ETFs run by ZKB and Bank Julius Baer, which have expanded their assets substantially this year.

ZKB’s gold ETF has increased its holdings from US$356 million to US$5.3 billion since the end of 2008. Julius Baer’s gold ETF has increased its holdings from US$272 million on 21 January 2009 to US$2.2 billion as at 16 December. These assets under management figures include all the currency classes of the respective ETFs.

Swiss regulations permit exchange-traded funds to track a single commodity. Within the EU, single commodity trackers cannot be ETFs under the UCITS rules and so they are most commonly called ETCs (exchange-traded commodities).

Commenting on the new ETC’s launch, Hector McNeil, global head of sales and marketing at ETF Securities, said, “Investors have been asking us for a long time to develop a product that stores its gold in Switzerland, in addition to our current gold ETC which stores its gold in London (PHAU). As a result of that feedback, we are excited to be able to offer investors a new way to invest in the gold market and an efficient way to geographically diversify their gold holdings.”