Blackrock Ishares Physical Gold - FSCS

Hi, Is the Blackrock iShares Physical Gold ETF covered by FSCS if Blackrock/iShares can’t pay out?

On the Key Information Document is says it won’t be covered (or appears to say it won’t).

Hi @GrahamOfDorset,

Interesting question. I thought I would link the KID Doc here and just try and break this one down.

  1. If you own iShares Physical Gold ETF on InvestEngine, the electronic share certificate is held in a CREST nominee account and you’re the legal owner of the shares/fraction of shares.
  2. As an owner of the fund, you have a legal claim over a portion of the fund’s assets. Looking at the details in the KID, the Physical Gold is technically owned by iShares Physical Metals plc and the iShares Physical Gold ETF has a ‘Metal Entitlement’ to its share of that gold.
  3. iShares Physical Metals plc underlying precious metals are then held in safekeeping in a segregated account at JPMorgan Chase Bank N.A. London Branch

The Financial services compensation scheme (FSCS) covers cash deposits. InvestEngine is covered by the FSCS – So cash you hold with us would be covered.

However, if you’ve bought iShares Physical Gold ETF your owner of the funds and by extension the physical gold – which ultimately is sitting in JPMorgan Cash Bank’s London Branch. This itself won’t be covered by the scheme and the value of the gold can go up as well as down.

Some extra details…
I did a bit of Googling for this next bit – JP Morgan’s London gold vault is a subterranean vault located in a deep basement under a JP Morgan building on **John Carpenter Street/60 Victoria Embankment, in the City of London. ** Map location link

I’ve linked details here, if you want to read more. Apparently, the vault itself is some 19m deep and (according to the article) held some 117 tonnes of gold in 2016.

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Lol, thanks for your reply Tom & clarification. Once my holdings grow beyond its current tiny amount I may well occasionally pop along to check the vault contents for peace of mind.

I’ll let you know if its empty with just a few JP Morgan IOU’s in there.

Thanks again

Best wishes

Graham

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