VanEck Merk Gold Trust ETF (OUNZ)
OUNZ offers an innovative feature allowing investors to trade shares for physical bullion. This makes the fund an intriguing option should gold prices rebound.
An ounce is any of several units of mass, weight or volume used internationally; most commonly in the US it refers to 28.349523125 grams – this international definition being most often adhered to.
Exchange-Traded Fund
VanEck Merk Gold Trust ETF (OUNZ) launched last week, following in the footsteps of physical gold ETFs like SPDR Gold Trust (GLD | A-100) and iShares Gold Trust (IAU | A-100). Although those funds store their metal securely within vaults around the world, OUNZ stands out in that investors can redeem for physical bullion through redemption options available with it.
Investors looking to take delivery of their OUNZ shares would need to submit a Delivery Application and instruct their broker to submit them, then wait for their bullion delivery – it won’t be subject to tax! As it already belongs to investors.
OUNZ can make taking delivery of physical gold a costly endeavor for investors. They must cover the conversion cost from London Bars into smaller bars and coins more suitable for delivery, along with any applicable conversion fees. Our delivery calculator helps investors plan the date that’s most suitable to them for submitting shares – factoring in leap years, expenses accrual and holidays when determining your ideal submission date.
Physical Gold
Gold has long been seen as an attractive hedge against economic volatility and market fluctuations. Due to its intrinsic value being uncorrelated with fiat currencies or inflation, physical gold provides an effective hedge against market instability.
Physical gold can be easily purchased and sold through various dealers online or in person, as well as gifted through wills and trusts. Futures trading involves more specialized investments with specific margin requirements; only brokers offering this trading offer access.
OUNZ investors who meet minimum redemption requirements can redeem shares for physical gold bullion on a monthly basis, provided they meet minimum redemption requirements. Their website provides details regarding fees associated with taking delivery of gold.
Redeeming Shares
OUNZ stands out from physical gold ETFs GLD and IAU by enabling investors to redeem shares for gold in increments as small as 1 troy ounce, making accumulation and redemption of precious metal more affordable for small investors than buying GLD or IAU shares and then purchasing and storing individual metal pieces themselves.
When you are ready to redeem, all that’s required to get started is using the OUNZ calculator to select your “Share Submission Date”, (the date upon which your broker irrevocably transfers OUNZ shares to the Trustee), and entering in how many fine ounces of gold you intend on taking delivery of. It can suggest possible redemption dates in the short term but as your redemption date approaches it would be prudent to consult your brokerage firm directly.
The calculator can also save you money by helping to prevent you from having to resell your gold, incurring additional transaction costs in the process.
Fees
As is common with gold funds, OUNZ charges a small fee to cover costs. It is essential that investors understand how this fee impacts their returns when investing in this fund.
Although researchers are eager to see signs of OZ impact, a growing body of work advises against premature judgments. Given the nature of incentives, regulatory rollout schedules, and community development projects all necessitating patience in order for impacts to take hold.
Researchers who have employed OZ incentives carefully have produced some of the most groundbreaking research. Examples of such work can be seen by Arefeva & Feldman (2023) showing OZ eligibility significantly increased commercial investment in targeted neighborhoods, and Wheeler’s findings that OZ designation led to multifamily homes being built (which in turn resulted in lower rental prices).
These studies do not accurately capture the long-term impacts of OZs; as better investment data becomes available, it will become necessary to establish which communities respond most favorably and the effect receiving investment has on those places.
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