Yuanta Securities Investment Trust (Yuanta) has launched Taiwan’s first commodity futures linked exchange-traded fund (ETF) - Yuanta S&P GSCI Gold ER ETF - with the new ETF to be listed on 14 April. “The introduction of our commodity futures ETF represents the broadening of investible scope of products within Taiwan’s ETF territory, in addition to onshore/offshore equity, bond and leveraged/inverse ETFs,” said Julian Liu (pictured), chief executive officer at Yuanta.

This new ETF will track the performance of the S&P GSCI Gold Excess Return Index, with the aim of raising at most TWD5bn (US$160m) with the lowest application fee at TWD20,000. “Taiwan investors are familiar with all kinds of gold related investments in the market,” said Liu. “By rolling out this gold ETF, we are hoping to pave the way for the introduction of the first gold warrants in the market, as well as the issuance of structured products linked to our new ETF, as a way to enrich the supply chain [of our gold ETF] and provide multiple hedging opportunities for investors.”

There were 131 gold ETFs outstanding worldwide by the end of last year attracting investment of US$62.1bn, which stood for nearly 60% of the total size of commodity ETFs, according to Shi Ping Tan, an assistant manager at Yuanta, “The gold price has been fluctuating within the range of US$1,150 to US$1,300 per ounce this year, while the global quantitative easing programme has injected a lot of liquidity into the market, and there seems to be an uptrend of the gold price,” said Tan.

The crude oil price has slumped this year and also attracted Yuanta’s attention. Liu said the next step of ETF innovation will be to launch a crude oil-linked ETF in Taiwan. “As the crude oil price has bottomed out, it seems to be an underlying full of potential for investor’s portfolio allocation,” said Liu.

The crude oil ETF will track the performance of the S&P GSCI Crude Oil Enhanced Excess Return Index and is expected to be launched in the second half of this year.

Yuanta has been keen to innovate in the ETF market and was first to launch leveraged/inverse ETFs in Greater China, and also the first securities to create a China benchmark CSI300-linked ETF in Taiwan.

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