Gyroscopic Investing

Posted: **Sun Nov 14, 2021 2:21 pm**

On the "new" front, I just read that the IAU folks introduced a new "mini" version, ticker IAUM, in late July, with the lowest ER (.15%) of any "paper" gold investment. The announcement said it's specifically targeted at longer-term investors rather than traders. Volume is of course quite thin at this early stage.

Looking at trading volumes, GLD,IAU,GLDM are the only ones with average volume above a million shares and represent about 90% of total gold ETF assets:

https://etfdb.com/themes/physically-bac ... esc&page=1

I noted with interest though that with AAAU's demise as a way to own gold that could be redeemed for physical bullion OUNZ seems to be the only U.S.-based ETF that's set up to permit that. I'm wondering why OUNZ isn't mentioned more often here as a top choice.

Posted: **Sun Nov 14, 2021 2:25 pm**

I wonder whether it's considered a wash sale to switch between IAU and IAUM.

Posted: **Sun Nov 14, 2021 2:57 pm**

Thanks for the info.

My IAU is in tax-deferred so I will be switching tomorrow.

Posted: **Mon Nov 15, 2021 2:27 pm**

Thanks!

Goodbye SGOL

Posted: **Tue Nov 16, 2021 12:31 am**

Good news for me. I am weary of GLD because its custodian is HSBC.

IAUM - JPMorgan Chase Bank N.A., London branch (the “Custodian”), is the custodian of the Trust. Which is the same as IAU. So now it's IAUM for me.

Posted: **Tue Nov 16, 2021 8:45 am**

I see there is now a GLDM (mini), with an expense ratio of 0.18%. I should dig into it and see if expenses are being waived. Has anyone looked into GLDM?

Posted: **Tue Nov 16, 2021 9:07 am**

I Shrugged wrote: ↑Tue Nov 16, 2021 8:45 am I see there is now a GLDM (mini), with an expense ratio of 0.18%. I should dig into it and see if expenses are being waived. Has anyone looked into GLDM?

Yes, see the link in my original post. GLDM has been around since 2018 and is to GLD what IAUM is to IAU: a much lower ER - albeit smaller and thus less liquid - gold ETF aimed a longer-term investors rather than traders.

Posted: **Tue Nov 16, 2021 10:34 am**

Converted all IAU in FIdelity IRA's to IAUM.

Interesting thing happened when re-purchasing the same amount. First I had to read and agree to a statement that I was a knowledgable investor and knew what I was doing. Then I was required to change the investment objective from "Conservative" to "Most Aggressive" - no other choice was allowed. I have no idea what this actually does or why it was even asked.

Other than those strange pop-ups it went very well. Was able to do the conversion, buying and selling, in a matter of minutes.

Posted: **Tue Nov 16, 2021 1:08 pm**

Sounds like ER's in the .15-.18% range may become the new normal eventually - as apparently they have been all along in Europe. At these levels costs for buy-and-hold investors are in the same range or even lower as physical bullion options like Bullionvault - albeit without the ability to redeem shares for physical gold (though of course you can do that with OUNZ provided you don't mind that it holds its gold in New York and thus doesn't permit the geographical asset diversification Harry Browne recommended).

https://www.etfstrategy.com/blackrock-u ... -us-98547/

Posted: **Tue Nov 16, 2021 5:11 pm**

I spent a bit of time reading the prospectus for IAUM and comparing it with both IAU's and those for GLD, GLDM, AAAU and OUNZ. Now I'm far from being an expert in parsing boilerplate and CYA legalese but there are clearly significant differences between these ETF's in terms not just of volume and liquidity but also their gold holdings (quantities, traceability, where the vaults are, who if anyone can redeem shares for bullion) and whether or not the gold is insured. And as other have mentioned, one also has to pay attention to whether a fund will be liquidated on a specific date in the future or is open-ended and how long it has been in existence, since the value of its gold holdings is slowly but surely diluted over time in order to pay for its expenses.

Focusing only on ER's does not seem prudent to me - but again, I'm no expert but like most others here try to be cautious. I guess if we were to follow Mr. Browne's sage advice to not invest in anything we don't [fully] understand we'd all stick to gold coins and bars in our personal possession but as we know that brings in another set of liabilities and concerns.

Posted: **Wed Nov 17, 2021 8:50 am**

I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.

Posted: **Wed Nov 17, 2021 4:57 pm**

Kevin K. wrote: ↑Tue Nov 16, 2021 5:11 pm I spent a bit of time reading the prospectus for IAUM and comparing it with both IAU's and those for GLD, GLDM, AAAU and OUNZ. Now I'm far from being an expert in parsing boilerplate and CYA legalese but there are clearly significant differences between these ETF's in terms not just of volume and liquidity but also their gold holdings (quantities, traceability, where the vaults are, who if anyone can redeem shares for bullion) and whether or not the gold is insured. And as other have mentioned, one also has to pay attention to whether a fund will be liquidated on a specific date in the future or is open-ended and how long it has been in existence, since the value of its gold holdings is slowly but surely diluted over time in order to pay for its expenses.

Focusing only on ER's does not seem prudent to me - but again, I'm no expert but like most others here try to be cautious. I guess if we were to follow Mr. Browne's sage advice to not invest in anything we don't [fully] understand we'd all stick to gold coins and bars in our personal possession but as we know that brings in another set of liabilities and concerns.

So were there differences between IAU and IAUM that troubled you?

Posted: **Wed Nov 17, 2021 6:48 pm**

Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.

Same with me and GLD.

Does PHYS allow you to redeem in gold? If so, that shouldn’t be taxable.

Posted: **Thu Nov 18, 2021 8:59 am**

pp4me wrote: ↑Wed Nov 17, 2021 4:57 pm
Kevin K. wrote: ↑Tue Nov 16, 2021 5:11 pm I spent a bit of time reading the prospectus for IAUM and comparing it with both IAU's and those for GLD, GLDM, AAAU and OUNZ. Now I'm far from being an expert in parsing boilerplate and CYA legalese but there are clearly significant differences between these ETF's in terms not just of volume and liquidity but also their gold holdings (quantities, traceability, where the vaults are, who if anyone can redeem shares for bullion) and whether or not the gold is insured. And as other have mentioned, one also has to pay attention to whether a fund will be liquidated on a specific date in the future or is open-ended and how long it has been in existence, since the value of its gold holdings is slowly but surely diluted over time in order to pay for its expenses.

Focusing only on ER's does not seem prudent to me - but again, I'm no expert but like most others here try to be cautious. I guess if we were to follow Mr. Browne's sage advice to not invest in anything we don't [fully] understand we'd all stick to gold coins and bars in our personal possession but as we know that brings in another set of liabilities and concerns.
So were there differences between IAU and IAUM that troubled you?

With respect to those two specific ETF's the only things that stood out to me were that they use different benchmarks and of course that trading volume in IAUM is very thin (as one would expect from a new ETF and I have no doubt that will change - possibly quite quickly).

Posted: **Thu Nov 18, 2021 3:22 pm**

Kevin K. wrote: ↑Thu Nov 18, 2021 8:59 am
pp4me wrote: ↑Wed Nov 17, 2021 4:57 pm
Kevin K. wrote: ↑Tue Nov 16, 2021 5:11 pm I spent a bit of time reading the prospectus for IAUM and comparing it with both IAU's and those for GLD, GLDM, AAAU and OUNZ. Now I'm far from being an expert in parsing boilerplate and CYA legalese but there are clearly significant differences between these ETF's in terms not just of volume and liquidity but also their gold holdings (quantities, traceability, where the vaults are, who if anyone can redeem shares for bullion) and whether or not the gold is insured. And as other have mentioned, one also has to pay attention to whether a fund will be liquidated on a specific date in the future or is open-ended and how long it has been in existence, since the value of its gold holdings is slowly but surely diluted over time in order to pay for its expenses.

Focusing only on ER's does not seem prudent to me - but again, I'm no expert but like most others here try to be cautious. I guess if we were to follow Mr. Browne's sage advice to not invest in anything we don't [fully] understand we'd all stick to gold coins and bars in our personal possession but as we know that brings in another set of liabilities and concerns.
So were there differences between IAU and IAUM that troubled you?
With respect to those two specific ETF's the only things that stood out to me were that they use different benchmarks and of course that trading volume in IAUM is very thin (as one would expect from a new ETF and I have no doubt that will change - possibly quite quickly).

Fidelity was obviously trying to dissuade me from buying IAUM after selling IAU by their pop-ups. I thought it might be the amount, about $186k in my account but the same thing happened in my wife's, which was only around $28k. No idea if it was because IAUM was new or they just wanted to discourage investment in Gold. Or somebody at Fidelity is an idiot who thinks they know more than you do which wouldn't surprise me at all.

Posted: **Thu Nov 18, 2021 6:41 pm**

If the analysis was a shallow one just the spread x # of shares would keep you in IAU by a long shot...so maybe they were flagging you on that???

Posted: **Tue Jan 04, 2022 6:33 pm**

Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.

PHYS is a Trust & therefore isn't taxed at the Collectibles rate: it is taxed like any other ETF.

Posted: **Thu Jan 06, 2022 9:16 pm**

johnnywitt wrote: ↑Tue Jan 04, 2022 6:33 pm
Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.
PHYS is a Trust & therefore isn't taxed at the Collectibles rate: it is taxed like any other ETF.

Thanks for this.

Posted: **Fri Jan 07, 2022 8:15 am**

johnnywitt wrote: ↑Tue Jan 04, 2022 6:33 pm
Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.
PHYS is a Trust & therefore isn't taxed at the Collectibles rate: it is taxed like any other ETF.

For the PP, I've got all stocks and LTTs in the tax deferred accounts and SHY+IAU in a brokerage. Selling IAU there will be taxed at the collectible rates?
Ouch. I was trying to avoid taxation of the dividends from stocks and LTTs .

Posted: **Fri Jan 07, 2022 10:17 am**

https://sprott.com/investment-strategie ... -youStates.

This explains it well.

Posted: **Fri Jan 07, 2022 10:19 am**

Ugly_Bird wrote: ↑Fri Jan 07, 2022 8:15 am
johnnywitt wrote: ↑Tue Jan 04, 2022 6:33 pm
Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.
PHYS is a Trust & therefore isn't taxed at the Collectibles rate: it is taxed like any other ETF.

For the PP, I've got all stocks and LTTs in the tax deferred accounts and SHY+IAU in a brokerage. Selling IAU there will be taxed at the collectible rates?
Ouch. I was trying to avoid taxation of the dividends from stocks and LTTs .

Boglehead thread: https://www.bogleheads.org/forum/viewto ... 1&t=366946

Posted: **Fri Jan 07, 2022 4:27 pm**

Don wrote: ↑Thu Jan 06, 2022 9:16 pm
johnnywitt wrote: ↑Tue Jan 04, 2022 6:33 pm
Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.
PHYS is a Trust & therefore isn't taxed at the Collectibles rate: it is taxed like any other ETF.
Thanks for this.

The caveat is that it trades away from NAV and the Spot sometimes Don. At least this is what I've gleaned from the research that I did like a year ago.

Posted: **Fri Jan 07, 2022 4:29 pm**

johnnywitt wrote: ↑Fri Jan 07, 2022 4:27 pm
Don wrote: ↑Thu Jan 06, 2022 9:16 pm
johnnywitt wrote: ↑Tue Jan 04, 2022 6:33 pm
Don wrote: ↑Wed Nov 17, 2021 8:50 am I bought PHYS years ago and dislike it but I don't want to pay taxes to switch out of it. I guess I'm stuck.
PHYS is a Trust & therefore isn't taxed at the Collectibles rate: it is taxed like any other ETF.
Thanks for this.
The caveat is that the NAV diverges from the SPOT Price sometimes Don. At least this is what I've gleaned from the research that I did like a year ago.

Posted: **Fri Jan 07, 2022 4:39 pm**

Yeah, I know. I've owned it for years.

Posted: **Fri Jan 07, 2022 4:44 pm**

Don wrote: ↑Fri Jan 07, 2022 4:39 pm Yeah, I know. I've owned it for years.

Yeah, in a taxable acct. it still might be the best choice & offer some useful utility.

Gyroscopic Investing

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