The first gold exchange-traded fund denominated in yuan closed little changed today after starting to trade in Hong Kong.
The Hang Seng RMB Gold ETF (83168) was introduced on the stock exchange by a unit of the Hang Seng Bank Ltd., the Hong Kong- based lender controlled by HSBC Holdings Plc. The fund closed at 34.90 yuan ($5.54) per share after opening at 34.85 yuan. One share equals one-tenth of a gram and 31,800 shares traded.
Spot gold in yuan climbed 6.1 percent last year in Shanghai, less than the 10 percent increase in bullion denominated in dollars, as the Chinese currency climbed 4.7 percent.
“It sounds like a good proposition,” said Zhu Lv, operations manager at Yinjian Futures Co. Zhu said that gold’s increase in yuan terms may be less than in dollar terms because of the appreciation of the currency.
Investors may take time to get familiar with the new product, said Song Qing, a fund manager at Lion Fund Management Co., China’s first asset manager to place money in foreign exchange-traded gold funds.
The Hong Kong ETF is designed to provide returns in yuan as it tracks the performance of the London Gold Fixing Price in dollars, according to the prospectus.