Hang Seng Investment Management has launched a up-to-date physically backed gold exchange-traded fund (ETF) in Hong Kong, with the option for future tokenized access to assets.
The Hang Seng Gold ETF has launched commercial listed on the Hong Kong Stock Exchange on Thursday under share code 3170, aims to track the LBMA AM gold price, a widely used morning benchmark set in London. The fund is structured as a passive ETF and holds physical gold bars that meet the London Bullion Market Association’s good delivery standards. According to to product details.
The gold held by the ETF is held in vaults in Hong Kong, with HSBC acting as the custodian of the gold. The structure allows for both the creation and redemption of cash and, in some cases, gold by participating dealers, although retail investors trade units on the secondary market like common shares.
The listed ETF class is traded in Hong Kong dollars and the lot size on board is 50 units. Its estimated fixed fee is 0.40% per year and its estimated annual tracking difference is minus 0.50%. Hang Seng said the fund does not intend to pay dividends, meaning returns will depend solely on changes in the gold price.
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Hang Seng maps tokenized gold units
In addition to the exchange-traded ETF, Hang Seng also outlined plans for tokenized, unlisted units of the same fund. These tokenized entities, which would represent ownership interests recorded on the blockchain infrastructure, are not yet available and are still subject to regulatory approvals.
HSBC has been appointed as the tokenization agent and will issue digital tokens representing ownership of units of the fund. Each token will correspond to a unit (or fraction of a unit), and subscription and redemption transactions will be recorded on the public blockchain.
“Initially, the Tokenization Agent intends to use Ethereum as the underlying blockchain. Other public blockchains with comparable levels of security resilience and distributed ledger technology may be adopted in the future,” he says prospectus.
However, tokenized units can only be subscribed to or redeemed through approved distributors. There will be no trading on the secondary market.
Gold prices increased on Thursday by another 4%, pushing spot gold to near $5,530 an ounce for the first time as investors continue to seek safe-haven assets amid growing economic and geopolitical uncertainty.
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NYSE is developing a tokenized shares platform
Last week, the New York Stock Exchange and parent Intercontinental Exchange announced they were developing a blockchain-based platform for trading tokenized stocks and ETFs, with plans for 24/7 trading and near-instant settlement, pending regulatory approval.
Meanwhile, in a recent report, Sygnum stated that customary financial institutions are moving towards blockchain-based infrastructure, with tokenization expected to go mainstream in 2026. Sygnum co-founder and CEO Mathias Imbach predicted that up to 10% of up-to-date bond issuances by gigantic institutions could be tokenized at launch.
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