Thoughts on holding PMGOLD in SMSF?

bron suchecki said:
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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One of my concerns with SMSF and physical metal is that people start a SMSF and abscond overseas before retirement age with their super in carry-on luggage, and it leads to some sort of crack down on super & physical metals.

Then again, one of the benefits of SMSF and physical metal is that you can abscond overseas before retirement age with your super in carry-on luggage... :lol:

Er, I mean, you can protect your assets during periods of force majeure, and repatriate them when economic and civil conditions are acceptable :|
 
goldpelican said:
bron suchecki said:
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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One of my concerns with SMSF and physical metal is that people start a SMSF and abscond overseas before retirement age with their super in carry-on luggage, and it leads to some sort of crack down on super & physical metals.

Then again, one of the benefits of SMSF and physical metal is that you can abscond overseas before retirement age with your super in carry-on luggage... :lol:

Er, I mean, you can protect your assets during periods of force majeure, and repatriate them when economic and civil conditions are acceptable :|
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AFAIK if your willing to renounce your Australian citizenship and leave the country for good you can access your Super at any age.
 
goldpelican said:
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.
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Sorry to bump this thread but did we reach a consensus?
 
Given my current employer is 6 months behind super contributions, my SMSF is sitting by idly - I can't roll over without breaking life insurance coverage - and I need a contribution to rock up before I can pay for insurance.

Absolutely seething about the opportunity cost, so I'm quite happy for silver to head south of $40 for a bit.

PMGOLD will still be part of the portfolio for me.
 
unfunkable said:
report them to ATO...ato stamps this out very hard...veryyyyyyyyy hard
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+1

I got annoyed when my employer was 3 weeks behind in super contributions, so I checked this out.

It turned out that employers are allowed to be up to 3 months in arrears with superannuation payments, anything more than this and they are breaking the law.
 
This is exactly the thread I've been after. Thanks Gold Pelican for starting this.

I've recently asked Bron to go deeper into PMGOLD on his blog, as he frequents here, I'll start some discussion here rather than clog up his blog.

Here is our conversation so far...

Anonymous said...

Hi Bron, with regards to the PMGOLD warrant on the ASX. Is the gold allocated or un-allocated? I've looked at the PDS and around but can't find a definitive answer.

17 September, 2012 19:30
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Blogger Bron Suchecki said...

On page 5 it says "although you have no interest in or ownership of the gold underlying your PMGs"

PMGOLD is just a securitised version of our unallocated.

18 September, 2012 08:52
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Anonymous Anonymous said...

Thanks Bron, My main concern is rehypothecation. It's been discussed extensively on Zerohedge and TFMetals which you frequent. From what I can understand when everyone starts asking for "delivery" there will be a run. Could you maybe write a detailed blog on this? What I'm referring to is, for example, apparently a lot of Gold/Silver ETF's don't actually hold the actual phys. Could you also elaborate on what you mean by "securitised version of our unallocated?"
Many Thanks, and keep up the great educational Blog.

18 September, 2012 19:07
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Blogger Bron Suchecki said...

I don't subscribe to the "ETFs don't have the metal" theory, see http://www.screwtapefiles.blogspot.com.au/2012/09/slv-database-3.html for some facts.

The run, if it happens, will be on bullion bank fractional unallocated accounts. I say "if it happens" because this requires paper traders to "get religion" and decide they want physical and I'm not sure that will come easily.

By "securitised" I just meant the creation of a security that trades on the ASX, not in the sense of a security that is sold/rehypothecated.

Perth Mint unallocated and PMGOLD are fully backed products where we use the metal in our operations. A materially different thing to fractional unallocated as offered by a bank (who by definition are in the business of lending).

18 September, 2012 20:34
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I understand what you mean now, however, why not make it "allocated?"

Thanks Bron so far.
 
Because that would introduce storage costs and we wouldn't be able to do a 0.15% management fee and most likely have a management fee higher than our competitors (because they don't fully insure their allocated).
 
Just looked at these on the ASX today and it appears that volume is quite light, I suppose what concerns me is with such light volumes and with a fairly vague statement about the market maker having to provide 'reasonable liquidy', is there a % between bid/offer that they have to adhere to?

And it looks like the option expires on 31 Dec 2029.
 
The market maker maintains a buy/sell spread equal to $12 and ounce.

It doesn't expire if you read the PDS, that date is there because the ASX's system requires a date and that is the latest date the can puit in - when building the computer system they didn't consider an option contract without and expiry.
 
OK Bron, thanks, that explains it. I was just looking at the ASX site when I saw the expiry date. Not sure what your exact involvement is with this but have you any idea what the open interest currently is?
 
bron suchecki said:
There is around 40,000 ounces being held in it from memory.
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So my math shows that their stockpile is around 1.2 tonne of gold...........is this ever actually audited?
 
f40 said:
AFAIK if your willing to renounce your Australian citizenship and leave the country for good you can access your Super at any age.
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Do you have a link that confirms this? The ATO website says that a temporary resident can access their super when leaving.
However if you have SMSF and the trustees become non-resident the whole fund is taxed at 49%. So if you have a SMSF and leave Australia for good (under age 60), renouncing citizenship, is this treated the same as a temporary non-resident leaving, ie take all the super, or will it result in loss of half the fund? Quite a difference!
 
Nomisma said:
f40 said:
AFAIK if your willing to renounce your Australian citizenship and leave the country for good you can access your Super at any age.
Click to expand...

Do you have a link that confirms this? The ATO website says that a temporary resident can access their super when leaving.
However if you have SMSF and the trustees become non-resident the whole fund is taxed at 49%. So if you have a SMSF and leave Australia for good (under age 60), renouncing citizenship, is this treated the same as a temporary non-resident leaving, ie take all the super, or will it result in loss of half the fund? Quite a difference!
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Get legal advice on this. Not an accountants advice or even advice from the ATO, who have a vested interest. Many times the law is very different to the ATO's rules/regulations.
 
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