SINGAPORE/SHANGHAI: A number of Chinese fund managers are gearing up to launch gold exchange-traded funds (ETFs) to meet a growing domestic demand for alternative investment channels. Guotai Asset Management, Bosera Asset Management and E Fund Management have got permission to develop gold ETFs with Shanghai Stock Exchange and Shenzhen Stock Exchange, company sources said. China, the world's largest gold producer, is on its way to overtake India as the top gold consumer this year. China's gold investment demand more than doubled between 2009 and 2011, contributing to a 70 percent jump in overall gold demand, according to the World Gold Council. Spot gold surged 43 percent during the period. So far this year, bullion has gained about 3 percent though prices are down 16 percent from a peak above $1,920 hit last year. Fund houses said they are confident their products will appeal to investors looking for alternative choices as other investment channels, especially stock and property markets, have been lacklustre. The benchmark Shanghai Composite index is down about 4 percent so far this year. "We believe the retracement in gold prices (from record levels) is good for investors in the medium to long term," a company official at Guotai Asset Management told Reuters on the phone, who declined to be named. Gold ETFs are easier to trade than gold coins and bars, and require less capital than trading futures or spot contracts. Hua An Asset Management is also among the fund houses preparing for gold ETFs, local media reported, but the company declined to comment.

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