Has the board settled on a preferred ETF for tracking gold?
Thanks
4x25%, GLD vs IAU
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Re: 4x25%, GLD vs IAU
I usually use the spot price to track gold.annieB wrote: Has the board settled on a preferred ETF for tracking gold?
Thanks
I'm not sure which ETF is the best, as far as ownership goes. If I was using only ETF's, I would probably just pick 2 or 3 and split it evenly.
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Pascal
Pascal
Re: 4x25%, GLD vs IAU
Sorry.I asked the question wrong.
I meant to ask which is the preferred etf to own for the 25% gold allociation.
I meant to ask which is the preferred etf to own for the 25% gold allociation.
Re: 4x25%, GLD vs IAU
I don't think that there is one.annieB wrote: Sorry.I asked the question wrong.
I meant to ask which is the preferred etf to own for the 25% gold allociation.
A lot of it depends on your individual situation and preferences.
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Pascal
Pascal
Re: 4x25%, GLD vs IAU
One consideration is who the sponsor is. IAU, TLT, and SHY are all BlackRock investments (no matter what brokerage you use to buy them), so if your long term or short term treasuries are in TLT or SHY, you might want to use SGOL or GLD rather than IAU for diversification purposes.
Another option that I think is worth serious consideration are the Canadian closed end gold funds, GTU and PHYS. Since these are closed end funds rather than ETFs they don't track the spot price of gold as closely (so you need to pay attention to the premium/discount when you buy or sell), however they're FAR simpler and far more transparent operations. GTU's sponsor has been running a mixed gold/silver fund (CEF) for over 40 years. These funds also qualify (for US tax purposes) as passive foreign investment companies, so if these are held in a taxable account (and you file the right forms every year with your taxes, i.e. form 8621) you'll pay the long term capital gains tax rate (currently 15% but increasing to 20% or 18% depending on how long term) rather than the collectibles gain tax rate (currently regular income tax, but no more than 28%) if/when you eventually sell.
Another option that I think is worth serious consideration are the Canadian closed end gold funds, GTU and PHYS. Since these are closed end funds rather than ETFs they don't track the spot price of gold as closely (so you need to pay attention to the premium/discount when you buy or sell), however they're FAR simpler and far more transparent operations. GTU's sponsor has been running a mixed gold/silver fund (CEF) for over 40 years. These funds also qualify (for US tax purposes) as passive foreign investment companies, so if these are held in a taxable account (and you file the right forms every year with your taxes, i.e. form 8621) you'll pay the long term capital gains tax rate (currently 15% but increasing to 20% or 18% depending on how long term) rather than the collectibles gain tax rate (currently regular income tax, but no more than 28%) if/when you eventually sell.
Re: 4x25%, GLD vs IAU
I like IAU and GTU.
Do your research on GTU before you buy it, though, and make sure you understand how the premium to NAV tends to fluctuate.
Do your research on GTU before you buy it, though, and make sure you understand how the premium to NAV tends to fluctuate.
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Re: 4x25%, GLD vs IAU
Not a fan of GLD for two reasons. First I think it's a tad pricey compared to IAU. Secondly when I first looked at it a number of years ago as a possible investment I found their prospectus to be so convoluted with legalese that after reading it three times I still wasn't sure how it all worked. Maybe they have improved it since then but I moved on. If I can't grasp an investment in 30 minutes I'm not interested in it.
As far as a preferred gold ETF my view is that most will do as long as you aren't planning on an SHTF scenario. Closed ended funds get tricky with their premiums. I don't feel the need for the hassle. I generaly figure just go with the cheapest ETF that has been around for a while and is run by a reputable firm. Right now that's IAU as far as I know. But others have made a good point that you don't want to have all your eggs in one firm's basket. In order to minimize your F&E and stay diversified I would substitute SCHO for SHY. They are functionally the same as are their F&E.
As far as a preferred gold ETF my view is that most will do as long as you aren't planning on an SHTF scenario. Closed ended funds get tricky with their premiums. I don't feel the need for the hassle. I generaly figure just go with the cheapest ETF that has been around for a while and is run by a reputable firm. Right now that's IAU as far as I know. But others have made a good point that you don't want to have all your eggs in one firm's basket. In order to minimize your F&E and stay diversified I would substitute SCHO for SHY. They are functionally the same as are their F&E.
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Re: 4x25%, GLD vs IAU
Thanks for allow of your thoughts.
Still reading..
Still reading..
Re: 4x25%, GLD vs IAU
I personally like IAU over GLD for the lower expenses and more straightforward prospectus.
For diversification away from BlackRock, direct LTTs and SCHO are both very good options, IMHO. They also have lower expense ratios than TLT (0.00 vs 0.15) and SHY (0.12 vs 0.15).
For diversification away from BlackRock, direct LTTs and SCHO are both very good options, IMHO. They also have lower expense ratios than TLT (0.00 vs 0.15) and SHY (0.12 vs 0.15).