Hang Seng Investment Management has launched a physically backed gold exchange-traded fund that gives investors direct exposure to bullion while also laying the groundwork for future blockchain-based access.
The product comes as global asset managers explore ways to combine traditional commodities with tokenization, even as regulatory approvals remain a gating factor.
Gold ETF details
The Hang Seng Gold ETF began trading on Thursday on the Hong Kong Stock Exchange under the stock code 3170.
It is designed to track the LBMA Gold Price AM, the London-set morning benchmark that underpins much of the global gold market.
The fund is structured as a passive ETF and holds physical gold bars that meet London Bullion Market Association good delivery standards.
According to product disclosures, the gold is stored in vaults in Hong Kong, with HSBC appointed as gold custodian.
Creation and redemption are available to participating dealers in cash and, in limited cases, in physical gold.
Retail investors, however, buy and sell ETF units on the secondary market in the same way as listed shares.
The listed class trades in Hong Kong dollars, with a board lot size of 50 units.
The ETF carries an estimated ongoing charge of 0.40% per year and an estimated annual tracking difference of minus 0.50%.
Hang Seng has stated that the fund does not intend to make dividend distributions, meaning investor returns will depend entirely on movements in the gold price rather than income payouts.
Tokenized unit plans
Alongside the listed ETF, Hang Seng has outlined plans to introduce tokenized unlisted units of the same fund.
These units are not yet available and remain subject to regulatory approval, but they would represent ownership interests recorded on blockchain infrastructure rather than through traditional share registers.
HSBC has also been appointed as the tokenization agent for this structure.
Under the proposed model, HSBC would issue digital tokens representing ownership of ETF units, or fractions of units, with subscription and redemption transactions recorded on a public blockchain.
The prospectus notes that Ethereum is expected to be used initially as the primary blockchain.
Other public blockchains with comparable security resilience and distributed ledger capabilities may be adopted in the future.
Despite the use of blockchain, tokenized units would only be available through approved distributors, and there would be no secondary market trading for these tokens.
Gold price backdrop
The launch coincides with a sharp move higher in gold prices.
Spot gold surged another 4% on Thursday, pushing prices to $5,595 an ounce for the first time.
The rally reflects continued demand for safe-haven assets amid heightened economic and geopolitical uncertainty.
For ETF investors, this price environment places greater emphasis on cost efficiency and tracking accuracy, given that returns are driven solely by changes in the underlying gold price.
Tokenization trend
Hang Seng’s tokenization roadmap sits within a broader industry shift toward blockchain-based market infrastructure.
Last week, the New York Stock Exchange and its parent Intercontinental Exchange said they are developing a platform for trading tokenized stocks and ETFs.
The initiative aims to enable near-instant settlement and round-the-clock trading, pending regulatory approval.
Separately, a recent report from Sygnum said traditional financial institutions are increasingly moving toward blockchain-based systems.
Sygnum expects tokenization to enter the mainstream in 2026, with its co-founder and chief executive, Mathias Imbach, suggesting that up to 10% of new bond issuance by major institutions could be tokenized at launch.
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