Mon, Feb 8, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund Hinde: Precious metals ETFs should not be owned by serious professional investors

Monday, August 16, 2010
Opalesque Industry Update - Precious Metal Exchange Traded Funds (ETFs) have become a popular way to invest in gold and silver. In a presentation published on Thursday, Hinde Capital discuss many of the important issues investors should be aware of before buying these products.

Comparing the State Street managed SPDR Gold Shares trust (GLD), which is the largest precious metals ETF (market cap of almost US$50bn) with physical ownership, Hinde Capital conclude that

  • ETFs should not be owned by serious professional investors
  • ETFs offer none of the benefits of physical bullion ownership
  • ETFs are no cheaper than owning physical allocated bullion stored and insured in secure vaults
  • ETFs are not as secure as owning physical allocated bullion either via a bullion fund or an allocated bullion account
  • ETFs provide no returns above the bullion price, only the likelihood of tracking at a discount or potentially failing to track the bullion price at all
  • ETFs do not provide 24 hour liquidity, unlike the bullion market itself

Instead, Hinde recommend opening an allocated bullion account with a Swiss private bank or bullion bank excluding custodians of GLD and SLV or investing with a bullion fund.

Hinde Capital's investor presentation 'Precious Metals ETF Alchemy GLD - the new CDO in disguise?' can be downloaded from the firm's website: Source
Florian Guldner

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  2. Credit Suisse cherry picks hedge fund ideas[more]

    From FT.com: Credit Suisse Asset Management plans to cherry pick profitable concepts from hedge funds with the launch in Europe of a “best ideas” strategy. The investment arm of the Swiss bank said the strategy will separate it from other funds blighted by “overcrowding problems”. It comes at a time

  3. Investing - Hedge funds bet on risks in U.S. blue-chip debt, Hedge funds bets against bank credit risk paying off, Tiger Global still likes Internet names, gets pointers from Jeter[more]

    Hedge funds bet on risks in U.S. blue-chip debt From WSJ.com: Hedge funds are betting the next bond sector to crack will be the $4.5 trillion market for the safest U.S. corporate debt. New York’s Perry Capital has placed a $1 billion wager against investment-grade bonds issued by 10 comp

  4. Short Selling - Hedge fund manager Kyle Bass is shorting real estate—again, Top US hedge fund has €80m short position in Paddy Power Betfair[more]

    Hedge fund manager Kyle Bass is shorting real estate—again From Fortune.com: He also predicted the mortgage crisis in 2008. Hedge fund manager Kyle Bass, who runs Dallas-based Hayman Capital, tanked the stock of a little-known real estate financier Friday by revealing that he is shorting

  5. Computer-driven hedge funds make money during January’s selloff[more]

    Komfie Manalo, Opalesque Asia: Commodity trading advisers (CTAs) that use computer programs to guide how they trade, made millions of dollars during last month’s market selloff on the back of declining oil prices and global equities and big moves in currencies. Data provider