Hang Seng Investment Management has introduced a new physically backed gold exchange-traded fund in Hong Kong, with the structure designed to allow for potential tokenized access at a later stage.

The Hang Seng Gold ETF began trading on the Hong Kong Stock Exchange on Thursday under stock code 3170 and is structured to track the LBMA Gold Price AM, the widely referenced morning benchmark set in London. The fund operates as a passive ETF and holds physical gold bars that comply with London Bullion Market Association good delivery standards.

The gold held by the ETF is stored in Hong Kong vaults, with HSBC appointed as the gold custodian. The fund supports both cash and, in certain circumstances, in-kind creation and redemption by participating dealers, while retail investors trade ETF units on the secondary market in the same way as listed shares.

The listed class is denominated in Hong Kong dollars, has a board lot size of 50 units, and carries an estimated ongoing charge of 0.40% per year, alongside an estimated annual tracking difference of minus 0.50%. Hang Seng noted that the ETF does not plan to distribute dividends, meaning investor returns are tied solely to movements in the gold price.

Tokenized units planned but not yet available

Alongside the listed ETF, Hang Seng has outlined plans to introduce tokenized, unlisted units representing the same underlying fund. These tokenized units would reflect ownership interests recorded on blockchain infrastructure, though they are not yet available and remain subject to regulatory approval. HSBC has been appointed as the tokenization agent and would be responsible for issuing digital tokens that correspond to full or fractional fund units, with subscription and redemption activity recorded on a public blockchain.

“Initially, the Tokenisation Agent intends to utilise Ethereum as the primary blockchain. Other public blockchains with comparable level of security resiliency and distributed ledger technology may be adopted in future,” according to the prospectus. The tokenized units would be accessible only through approved distributors, and no secondary market trading is planned.

Gold rally and broader tokenization push

The ETF launch comes as gold prices continued to climb, rising another 4% on Thursday and pushing spot gold close to $5,530 per ounce, as investors increasingly turn to safe-haven assets amid economic and geopolitical uncertainty. Beyond gold, momentum around tokenized financial instruments is building more broadly. Last week, the New York Stock Exchange and its parent, Intercontinental Exchange, announced the development of a blockchain-based platform for trading tokenized stocks and ETFs, subject to regulatory approval.

In a separate report, Sygnum said traditional financial institutions are steadily moving toward blockchain-based market infrastructure, with tokenization expected to enter the mainstream in 2026. Sygnum co-founder and CEO Mathias Imbach said that as much as 10% of new bond issuance by major institutions could be tokenized at launch.

Sources:

https://www.hangsenginvestment.com/en-hk/individual-investor/our-products/etf-listed-details/?TrustNo=H09822&FundClass=B&FundUnit=NA

https://www.hkex.com.hk/Market-Data/Securities-Prices/Exchange-Traded-Products/Exchange-Traded-Products-Quote?sym=3170&sc_lang=en

https://cointelegraph.com/news/hang-seng-launches-physical-gold-etf-tokenized-units

https://cms.hangsenginvestment.com/cms/ivp/hsvm/document/3170_kfs_listed_e.pdf

https://cms.hangsenginvestment.com/cms/ivp/hsvm/document/3170_od_e.pdf

https://goldprice.org/