The FSA Spy market buzz – 13 December 2024
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HEAD-TO-HEAD: SSGA vs Value Partners
FSA compares the strategy of two exchange-traded funds: the SSGA SPDR Gold Shares ETF and the SAM Value Gold ETF, which are the only physical gold passive funds available for sale in Hong Kong.
The comparison between the SPDR and Value Partners ETFs should be based on the ability of the products to serve the purpose of tracking the gold price.
Ng said both funds meet the standard requirement of an ETF, which is to closely follow a given index.
“The SPDR and Value ETFs are both good vehicles to track the bullion price movement,” he noted.
“Deviation of the funds from their indices cannot be avoided entirely. But their tracking differences are with the range of ‘reliable,’” he added.
However, the SPDR product has an advantage in terms of cost and investor base, he said.
Value Partners, by comparison, offers a lower capital requirement for entry to both retail and institutional investors.
In addition, Value Partners provides share classes denominated in Hong Kong dollars, renminbi and US dollars while SPDR is available only in Hong Kong dollars.
“The selection between the two ETFs would be subject to an investor’s preference of trading currency,” Ng said.
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