Hi guys, I was wondering what everyone thinks about ETFs? Such as GLD and SLV and the like to invest in. My first preference would be physical gold as the fiscal cliff approaches, but I'm not in a position to buy physical right now, so I'm thinking of putting some $ into GLD before the fiscal cliff hits. Is anyone doing this at the moment? Any thoughts in this? Cheers, DG
I'm interested in ETF's as well, but it is hard to get information on them. I've gone looking at the Aussie Stock Forums for general ETF info but there isn't much out there. Generally amongst stackers the gold ETF has a bad reputation for being set up to make the ETF manager rich rather than investors. Personally I'm interested in the oil ETF to capitalise on the volativity of that market and difficulty in every buying physical of that commodity. If all else fails, there is always unallocated physical metals if you don't have the circumstances to hold it yourself.
I think you will find the general consensus on this forum is to not touch most ETF's due to the questionable backing. ETPMAG, QAU, and GOLD fall into the don't touch category for me. They are not shares, but warrants, which rings alarm bells for me straight away because it means it is a call on the phys, and not unallocated. Besides questionable backing, their stated aim is "to track the performance" of the underlying metal before fees and charges. First, why is it only their aim? - tracking the price shouldn't be that difficult if you are holding the metal? The fine print states that they are not obliged to track the exact price - (wtf?! - this leaves you open to being ripped at the fund's discretion). QAU even sprukes that all underlying physical holdings will be held by JP Morgan.... (DANGER!!!) I do however hold PMGOLD in an SMSF, as it is back by phys held at the Perth Mint. OOO is about your only choice. But if you want to capitalise on the volatility of the oil price, you can't beat using CFD's. They are cheaper, easier and more effective IMHO.
I play hockey with a guy who holds 400,000 oz in toilet paper silver Every time spot drops he winges about how much his losing All I keep telling him to do Is " take delivery " of it And I tell him I don't care if it drops I'll just buy more , don't think he gets it It could be very easily sorted with goldstackers , but I think physical confuses him Like paper confuses me
If holding the particular ETF isn't the best then you could always trade options over them to gain exposure?
PMGOLD I'm looking at for the future. I've been following the price for OOO. I still don't understand why a unit is over $46 each, for example. What assets in the fund or in the wider market underpin that price? I finally got around to looking at the analysis on OOO by my broker and there is almost no information there beyond $2m in cash and $2m liabilities held by the fund. No other assets? I also don't yet understand in what form and when an ETF makes a dividend or distribution. And what is the tax treatment of an ETF distribution for the unitholder? So much to learn. Thanks for the tip on CFDs. Yet another investment vehicle for me to start researching.
Nothing underpins that price except cash. It is effectively a cash pool that is used to trade futures to try and track the WTI oil price via S&P GSCI Crude Oil Index Futures. What is GSCI? - Goldman Sachs Commodity Index. :lol: Management fees are deducted. Distributions are composed of any interest accumulated by this cash pool. Dividend distribution is a cash payment (unfranked) that has a tax treatment the same as any other unfranked dividend. Why would I stay clear? - because of this disclaimer: "Commodity ETFs: The index which each BetaShares commodity ETF aims to track is based on the price of futures contracts. Investing in commodity futures is not the same as investing in the "spot price" of a given commodity. The ETFs do not aim to, and should not be expected to, provide the same return as the performance of the spot price of the relevant commodities. The performance of ETFs that are linked to commodity futures may be materially different to the spot price for the commodity itself. Also, differences in trading hours of the underlying futures markets and their corresponding BetaShares ETFs may at certain times cause the difference between bid prices and offer prices on the ASX to widen significantly." (Source: http://www.betashares.com.au/products/name/crude-oil-index-etf-currency-hedged/#each-distributions)
