Of course, Zuercher was the original differentiator -- and it’s found that being a targeted niche player in a growing universe works well for the firm.
Eleven years on, its gold ETF holds nearly $6 billion in assets, down from a peak of $19.4 billion in 2011, when the price of bullion was at an all-time high. ZGLD remains somewhat obscure, trading around 6,500 shares a day, compared with around 365,000 shares for Deutsche Boerse Commodities GmbH’s Xetra-Gold ETF, symbol 4GLD, which is the biggest fund in Europe tracking the metal. With an expense ratio of 40 basis points, it’s also more expensive than the Xetra fund, which charges 36 basis points, according to data compiled by Bloomberg.
Although being large and charging the lowest fee is often the way to go in the ETF industry, ZKB is bucking that trend. By staying small, tightly focusing on its audience and not being too concerned about cost, the firm is finding success.
It has no plans to change that formula anytime soon. Why bother? As Nicoli notes, the strategy has been “highly profitable” for the bank so far.
This article was provided by Bloomberg News.