Portfolio X-Ray · Research

Same gold, different wrapper

By Rogha ETF · 15 October 2026

Published 15 October 2026 · Research

Gold products can look much alike on a price chart. Read the documents behind them and the differences become clearer: who holds the metal, what claim you have on it, and whether you can ask for delivery.

A recent Financial Times column brings the custody question into focus. In “London’s gold market enjoys the Trump effect”, John Gapper describes bullion returning to London and central banks placing greater value on its physical trading market. He also notes that some funds whose shares trade on New York exchanges hold their backing gold in London vaults. The shares trade in the US; the physical bars can be elsewhere.

For an investor, that last point is worth pausing on. The exchange where you buy a gold security, the currency you pay in and the vault holding its gold can be in three different places. A London listing does not tell you where the metal is. A euro price does not tell you whether the currency exposure is hedged.

We examined five popular unhedged gold products. Four hold allocated bullion under secured structures. The fifth holds physical gold and gold-delivery claims, but gives noteholders an unsecured claim. None is a UCITS ETF: they are exchange-traded commodities, or ETCs, issued as debt securities or certificates.

What London’s gold story means for an ETC holder

Our reading of the FT piece is that it makes the infrastructure behind a gold investment more relevant to the comparison. Several products in our sample use London custody arrangements. The questions are concrete: whose name is on the metal account, which assets support the security, and what happens if an institution in that chain fails?

Allocated gold means identifiable bars held for the relevant account owner. A bar list records those bars, including details such as their refiner, serial number, weight and purity.

The list is connected to creation and redemption, but it serves a different purpose. An authorised participant, or the equivalent participant under an ETC’s terms, arranges to create or redeem securities. This can involve adding or withdrawing gold. The bar list is a snapshot of the inventory, rather than a record of that transaction process. Its date matters because the inventory can change as securities are created and redeemed. An older list may accurately describe the gold held then without establishing what is held today.

Gold can also pass through an unallocated account during settlement, including parts of the issuance and redemption process. In an unallocated account, the account holder has a claim against the custodian for an amount of metal, rather than rights to identified bars. During that period, it is exposed to the custodian’s ability to meet the claim. Allocation replaces that balance with identifiable bars held for the relevant account. Operational use of an unallocated account does not mean that a product’s entire backing is normally unallocated; the permitted arrangements and timing are set out in its prospectus.

Buying the security gives you the rights set out in its documents. It does not automatically make a particular bar yours. In four of our examples, those rights are supported by security over specified assets. The fifth prospectus expressly says noteholders are unsecured. Physical gold can therefore sit behind two products whose investors have different legal claims. Security gives investors rights over specified assets, but it does not guarantee full repayment. If the security has to be enforced, the proceeds are distributed in the order set out in the documents. Enforcement expenses and other claims with priority can be paid before investors receive their share. In one sample prospectus, those prior claims include amounts owed to the trustee, receiver, registrar and custodian. The certificates also have limited recourse: if the relevant assets are insufficient, investors cannot claim against the issuer’s other assets, and the remaining claim is extinguished. The precise payment order needs to be checked for each product.

Your return is measured in your currency

Gold is conventionally priced in US dollars. Unless a product explicitly hedges the exposure, a euro investor’s result reflects both the USD gold price and the exchange rate. Buying its EUR trading line does not remove that effect.

Take a hypothetical ounce of gold priced at $4,000. If €1 buys $1.10, that ounce is worth about €3,636. Now suppose gold rises to $4,400 while €1 buys $1.20: its euro value is about €3,667. The higher dollar gold price has been largely offset by the stronger euro. If gold instead stays at $4,000 at that new exchange rate, its euro value falls to about €3,333. In each case, divide the dollar gold price by the number of dollars one euro buys. These are illustrations, before product costs, rather than current prices or forecasts.

A EUR-hedged version uses an explicit mechanism intended to reduce the effect of EUR/USD movements, although some currency exposure may remain. Hedging can also add cost, without necessarily increasing the headline fixed fee. In a matched pair we checked, both products disclose a fixed fee of 0.12% a year, while the EUR-hedged version adds a separate FX hedge fee of 0.15% a year. Those two disclosed fees total 0.27%; that is not a quoted TER or a complete measure of the hedge’s effect on returns. The identified products and official sources are in the methodology note.

There is one more question to ask before choosing a wrapper: do you want to redeem it for physical gold? If you want price exposure and expect to sell the security on exchange, delivery rights may matter less to your choice. If you want to receive gold, the details become central. Our sample includes specialist metal-account settlement and conditional bank delivery, as well as products where selling on exchange is the normal retail exit. Check the minimum quantity, permitted destinations and whether your broker can process the request. A right to settle through a metal account is not the same as having a bar delivered to your home. We have not established delivery to Ireland.

The London story gives us a reason to look more closely at those arrangements. It does not change what the comparison needs to establish. Follow the chain from the security in your account to the metal behind it, then compare the claim, redemption rights and currency policy. That is where products following the same gold price can differ.

Read the methodology note, product identities and official sources.