OUNZ Gold ETF
OUNZ is the first physical bullion-backed ETF that allows investors to redeem shares for actual gold, with its website featuring an easy-to-use calculator allowing investors to determine how many OUNZ shares must be redeemed in order to receive one troy ounce of precious metals.
Novogradac’s Opportunity Zones (OZ) Working Group provides industry professionals with a forum for discussing technical OZ incentive issues and will continue its work through 2023.
Investors can redeem their shares for physical gold
Gold exchange-traded funds (ETFs) provide a convenient way to gain exposure to precious metals. Trading on the same markets as common stocks of commodity and mining companies, these ETFs allow investors to redeem their shares for physical gold at anytime.
Investors opting to take delivery of their shares will be subject to a processing fee. The fund website features an informative table outlining these fees associated with taking delivery.
Investors will also incur storage and insurance fees when redeeming shares for physical gold, with one-ounce bars or coins being made available as choices for redemption. Gold bullion held in an allocated form never mixes with the assets of the Trust to give peace of mind and assure investors that each OUNZ represents real gold stored under custody by their Custodian.
The Trust holds London Bars
OUNZ is the first and only gold ETF that gives investors direct exposure to physical bullion via physical delivery of shares redeemed for redemption, offering either 1 ounce coins or bars in return.
For an efficient process, the Trust holds London Bars. Their patented process enables them to convert them into various gold coins and bars investors may request upon redemption; other forms of physical gold usually incur conversion costs and require dealing with precious metal dealers prior to being sent out as deliveries to Delivery Applicants.
Converting London Bars into coins and bars that meet delivery applicants’ specifications may take up to two business days depending on your location, so we charge an Exchange Fee in order to cover our costs associated with reviewing, coordinating, and converting London Bars into the gold requested by a Delivery Applicant as well as related expenses incurred by both Trustee and us.
The Trust’s NAV is based on the LBMA Gold Price Index
OUNZ offers an easy, cost-efficient way to gain exposure to gold without the hassles associated with purchasing, transporting, or storing physical gold. Utilizing a grantor trust structure and its NAV calculated using each day’s LBMA Gold Price Index value.
The London Bullion Market Association Gold Price Index is an internationally recognized official benchmark of unallocated gold delivered in London. The index is determined through an auction process held every business day at 10:30 am and 3:00 pm London time by members of LBMA.
OUNZ’s NAV is determined using the LBMA Gold Price Index, with gold held by its custodian being valued against this index. Over time however, investors’ returns may decrease due to sales conducted to pay the Sponsor’s fee and expenses, thus decreasing investors’ total gold holdings represented by shares over time. Investing in OUNZ involves risks including possible principal loss; please read carefully the prospectus prior to investing.
The Trust’s Custodian holds the physical gold
Contrary to many financial products that gain exposure to gold via derivatives that expose them to credit risks, the Trust holds its physical gold in an allocated account with its Custodian. On any given business day, some gold may move in or out through unallocated accounts so as to accommodate creations by Authorized Participants and redemptions by Investors.
For physical gold that does not fall under London Bars, the Custodian will require that the number of shares submitted closely correspond with the Fine Ounces requested – this ensures any applicable sales taxes will be covered by the Delivery Applicant instead of Trust.
The Trust’s Custodian will secure all the gold held by it in vaults in a safe location. As its custodian never sells or borrows any gold it holds, investors have minimal credit risk compared with other exchange traded funds holding physical metal in unallocated form.