World's Largest Gold ETF Is Getting a Cheaper Little Brother

(Bloomberg) -- The price of gold is falling, at least for investors in exchange-traded funds.

The World Gold Council is readying a new fund that will charge less than any other gold ETF, regulatory filings show. It will vie for assets with 35 other precious-metals exchange-traded products in the U.S., including SPDR Gold Shares -- known by its ticker GLD -- the $35 billion market leader, which the council also started.

Despite gold’s recent slump amid higher interest rates, enthusiasm for the commodity as both a trading instrument and a store of value has been strong this year. Trading in GLD soared during February’s volatility as investors sought to bet on, or hedge against, markets heading south. A rival fund from BlackRock Inc., meanwhile, took in more than $700 million in both January and April, the most for any month in two years, Bloomberg data show.

World's Largest Gold ETF Is Getting a Cheaper Little Brother

The gold spot price has risen less than 0.1 percent this year. The metal was trading at $1,304.47 an ounce as of 9:25 a.m. in New York.

Investors will soon be able to get a piece of that action for a lower price. The SPDR Gold MiniShares Trust, which will trade as GLDM, will cost just 18 basis points in management fees, or $1.80 for every $1,000 invested, the filings show. By comparison, GLD charges $4 for every $1,000 invested.

The fund will also start trading with a significantly lower share price than GLD, allowing investors to buy in smaller increments, the documents show.

GLDM’s shares will start trading at around $12.98, the filings suggest, versus about $123 for the older fund. That would put GLDM on a par with BlackRock’s iShares Gold Trust, which trades at $12.47 per share. However, it charges $2.50 for every $1,000 invested.

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