New Gold ETF: Merk Investments Files For Merk Gold Trust (OUNZ)

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April 23, 2012 3:01pm NYSE:AGOL NYSE:GLD

Merk Investments has filed paperwork with the SEC for a “Merk Gold Trust.” The Merk Gold Trust (Trust) issues Merk Gold shares (Shares), which represent units of fractional undivided beneficial interest in the Trust.  The Trust’s primary objective is to provide investors with an opportunity to invest in

gold through the Shares and be able to take delivery of gold bullion in exchange for their Shares.  The Trust’s secondary objective is for the Shares to reflect the performance of the price of gold less the expenses of the Trust’s operations.  The Trust is not actively managed. Merk Investments, LLC is the Trust’s sponsor; The Bank of New York Mellon is the trustee of the Trust; and JPMorgan Chase Bank, N.A. is the Trust’s custodian. They plan to trade this ETF on the NYSEArca under the symbol: (NYSEARCA:OUNZ)

The Trust will hold London Good Delivery Bars and may hold other gold bars and coins with a minimum fineness (or purity) of 995 parts per 1,000 (99.5%), except that the Trust also may obtain American Gold Eagle gold coins (with a minimum fineness of 91.67%) solely for the limited purposes described herein.  Collectively, the physical gold bullion the Trust may hold is referred to herein as the “Gold Bars.”

The Shares provide investors with the opportunity to access the gold market though a traditional brokerage account.  The Sponsor believes that investors will be able to more effectively implement strategic and tactical asset allocation strategies that use gold by investing in the Shares than by purchasing, holding and trading gold directly.  The Trust is one of several exchange-traded products that seek to track the price of physical gold bullion.  Certain other financial products may gain exposure to physical gold bullion through the use of derivatives that may be subject to counterparty and credit risks.  The Trust will not hold or employ derivative securities.  The Gold Bars also are not subject to borrowing arrangements with third parties.  Accordingly, the Trust’s allocated gold will not be not subject to counterparty or credit risks.  The value of the Trust’s Gold Bars will be reported on the Trust’s website daily.  See “Business of the Trust – The Trust’s Guiding Principles.”

Individual Shares will not be redeemed by the Trust but are listed and trade on NYSE Arca under the symbol “OUNZ.”  A Delivery Applicant may deliver Shares to the Trust in exchange for Gold Bars after submitting to the Sponsor a qualifying document that expresses the Delivery Applicant’s non-binding intention to exchange Shares for Gold Bars on the Share Submission Day (Delivery Application) along with the applicable processing fees.  See “Taking Delivery of Gold Bars.”  The number of Shares to be delivered must correspond in value to the Fine Ounce content of the Gold Bars requested.  To meet its primary objective to provide investors with an opportunity to invest in gold through the Shares and to be able to take delivery of physical gold bullion in exchange for their Shares, the Trust is committed to its guiding principles.  See “Business of the Trust – The Trust’s Guiding Principles.”

The Trust will issue Shares to pay the Sponsor Fee and reimburse the Sponsor for expenses that the Sponsor has paid on the Trust’s behalf.  Should the need arise for the Trust to sell gold for expenses the Sponsor does not pay, the purchase price received as consideration for such sales will be the Trust’s sole source of funds to cover its liabilities.  The Trust does not engage in any activity designed to derive a profit from changes in the price of gold.  Gold not needed to redeem Baskets, or to cover the Trust expenses not assumed by the Sponsor, is held in physical form by the Custodian (other than up to 430 Fine Ounces of gold which may be held by the Custodian on an unallocated basis at the end of each business day).  As a result of the recurring issuance of Shares necessary to pay the Sponsor Fee in-kind and potential sales of gold to pay in cash the Trust expenses not assumed by the Sponsor, the net asset value of the Trust and, correspondingly, the fractional amount of physical gold represented by each Share will decrease over the life of the Trust.  New deposits of gold, received in exchange for additional new Baskets issued by the Trust, will not reverse this trend.

For the complete filing click: HERE

Related: SPDR Gold Trust (NYSEARCA:GLD), iShares Gold Trust (NYSEARCA:IAU), Sprott Physical Gold Trust (NYSEARCA:PHYS), ETFS Gold Trust (NYSEARCA:SGOL), ETFs Asian Gold Trust (NYSEARCA:AGOL).

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