Thoughts on holding PMGOLD in SMSF?

goldpelican

goldpelican

Well-Known Member
Silver Stacker
Well came back from the US to find that my SMSF setup went smoothly - now I just need to tackle rolling over a number of existing funds to get some money into it.

Part of my metal strategy for SMSF was considering holding gold both physically and via Depository... but given that the fund has a CommSec account attached, buying the Perth Mint call option PMGOLD (supercedes the old ZAUWBA) is now also on the cards.

The management fee is 0.15% pa - which is pretty damn cheap - a $300pa safe deposit box would need to be holding 140oz of gold at today's prices to be comparable to the management fee, and that's without the consideration of any transport/delivery fees to take delivery of 140 physical ounces.

Seems a sensible approach for holding gold via SMSF - thoughts? I don't want to hear the "if you don't hold it you don't own it" argument - as far as I'm concerned, due to sovereign risk I don't own the assets under management in superannuation until I retire - that's when I'll be holding it.
 
what's the difference between PMGOLD and PMDS (un/allocated)?

Am thinking about the same issue myself right now..have got the docs requirements from Perth Mint for the account.
 
PMGOLD is a call option traded on the ASX that you trade via a stock broker.

PMDS is the Perth Mint Depository Services - you open an account directly with the mint, and typically trade via telephone. Nothing to do with the ASX.
 
goldpelican said:
PMGOLD is a call option traded on the ASX that you trade via a stock broker.
Click to expand...

So upon an expiration you'd have to take a delivery unless you roll it on, which would mean you pay additional commissions?
Unless it's not a usual call?
 
PMGOLD seems particularly interesting to me since some super funds let you choose ASX listed investments.

So that means I could in theory invest my super into gold without having to setup an SMSF.

One that I'm looking at is MLC and their "MasterKey Custom Self-Managed Super" option.

Anyone have experience with this?
 
Many (most? all?) retail super funds that allow direct investment in shares limit it to the top 200 shares etc. There was only one super fund that allowed the former ZAUWBA to be purchased, and that was only for Perth Mint employees - a forum member enquired with them and were told it was not available for the general public.
 
I am no expert at all in this area but considering the fees and the Government backing I would say it is a good option. Plus the fact that you run the fund and have a fair finger on the pulse of whats happening if you needed liquidity fast this allows it. Apart from holding physical I can not see a down side and even holding that poses its own risks.

When I get my SMSF up in the next month or two I will be seriously considering this option also. So keen to see how it goes for you if you head this way.
 
You appear to be right GP. Looking more closely at that MLC offering it is basically an SMSF that you outsource the management of and not intended for personal super. There personal super offerings don't have the same flexibility.

Looks like I have to go the SMSF route as well.
 
s1lv3r said:
So upon an expiration you'd have to take a delivery unless you roll it on, which would mean you pay additional commissions?
Unless it's not a usual call?
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To my knowledge it's an "open ended" option - there's no fixed expiry date. Bron could explain it better.
 
I like the depository notes etc.

Just some thinking material though, not that its realistic, but say there was a total financial meltdown, war, shtf etc. most of those things have force majeure clauses that could rob you of the investment.

Physically held metals on the other hand are under your control always. Only risk is in a shtf scenario that they could be lost......
 
TopMetal said:
One that I'm looking at is MLC and their "MasterKey Custom Self-Managed Super" option.

Anyone have experience with this?
Click to expand...
If you have aspirations of eventually going for a SMSF - be very warned of getting your funds transferred in a timely manner!
 
boston said:
TopMetal said:
One that I'm looking at is MLC and their "MasterKey Custom Self-Managed Super" option.

Anyone have experience with this?
Click to expand...
If you have aspirations of eventually going for a SMSF - be very warned of getting your funds transferred in a timely manner!
Click to expand...

+1, MLC is a nightmare to deal with when it comes to a SMSF.

I will never ever deal with MLC again unless i absolutely have to.
 
f40 said:
boston said:
TopMetal said:
One that I'm looking at is MLC and their "MasterKey Custom Self-Managed Super" option.

Anyone have experience with this?
Click to expand...
If you have aspirations of eventually going for a SMSF - be very warned of getting your funds transferred in a timely manner!
Click to expand...

+1, MLC is a nightmare to deal with when it comes to a SMSF.

I will never ever deal with MLC again unless i absolutely have to.
Click to expand...

+2, I won't have to deal with them ever again. My brother does when he gets around to rolling out the funds.

Suffice to say, my roll out was pretty quick and easy. I got every page of the deed signed and certified. =D

Slam
 
Thanks for the heads up on MLC guys.

I've decided to go the SMSF route myself now and will be looking at PMGOLD once it's up and running.
 
Probably a very basic answer needed here ..... but .....

The fact that PMGOLD generally tracks the spot price - Is this investors saying "Gee, spot has gone from $1350 to $1400. I better start bidding $14.00 on PMGOLD".
Or is there some other magical force at work that I don't know of? (Invisible Hands do not count!)

e.g. if you see PMGOLD trading at $12.00, and spot is at $1400, this is a buying opp, right? (because each PMGOLD eventually entitles you to 1/100oz of gold).
 
PMGOLD is just the Perth Mint buying and selling on the stock market. They have a bid price and an ask price and they'll adjust those in line with the rest of the market, so you're buying and selling to them rather than buying and selling to other random people.

Basically its just the same as the PMDS unallocated product they have but you access it via the ASX rather than by phoning them.
 
+1 to that - I believe Perth Mint have to act as a "market maker" for this product. I've flicked Bron a PM asking for an educated explanation.
 
Perth Mint has engaged Deutsche Bank to make a market in PMGOLD, which means when they always have a bid and offer sitting on the ASX that is equal to the current AUD gold price and gives investors a "reference rate". Ideally you can find a bid or offer inbetween that from another investors and get a better price.
 
There is no expiry date on the new PMGOLD, that was one of the changes.

If you have a super account not as a SMSF, I would certainly push the trustee to list PMGOLD on their list of ASX tradable investments. Now that PMGOLD is classed as an ETF and not a warrant, that should make it easier.

One argument you can use is that if the trustee allows direct investment in a gold miner then it should allow PMGOLD, because a gold miner is a leveraged play on gold whereas PMGOLD is the underlying gold, so less risky. It would be illogical of them to allow investment in a more risky "derivative" of gold but not in the less risky underlying.

As to the "if you don't hold it" that is only a consideration for a SMSF who could go with physical metals. For the rest of us stuck in a super fund, we run the risk that the Government will nationalise super accounts http://www.moneymorning.com.au/20110124/why-your-retirement-isn’t-assured.html so no additional risk holding gold in your super.
 
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