Tue, Feb 28, 2017
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. Institutional investors plan to raise allocations to alternative assets in 2017[more]

    Komfie Manalo, Opalesque Asia: A survey by Context Summits Miami showed that nearly 72% of institutional investors and family offices plan to raise their allocations to alternative asset managers this year, suggesting continued strong demand for the industry. "As many large, brand name f

  2. Comment - Mortgages, mergers and hedge fund fees, Fairholme's Berkowitz responds to court ruling against hedge fund suits of Fannie Mae[more]

    Mortgages, mergers and hedge fund fees From Bloomberg.com: Yesterday the U.S. Court of Appeals for the D.C. Circuit handed down an odd decision in a lawsuit over the government's nationalization of Fannie Mae and Freddie Mac. The key issue is what's called the "Third Amendment," the 2012

  3. Investing - Hedge funds continue to chase the herd in record Momentum wager, Marshall Wace bets grocer Sainsbury may need rights offering, Hedge fund net exposure has started to retreat, David Tepper's Appaloosa fund makes a huge buy, The 10,000-mile journey to Short Australia, Skeptical hedge fund investors grill Evan Spiegel about Snap's I.P.O.[more]

    Hedge funds continue to chase the herd in record Momentum wager From Bloomberg.com: Hedge funds can't get enough of momentum - even if it means embracing an investing strategy they hate. Loosely defined as betting on shares that went up the fastest over the preceding nine-to-12 months, h

  4. Opalesque Exclusive: Swiss investors take fund seeding and acceleration into their own hands[more]

    Benedicte Gravrand, Opalesque Geneva: Banque Bonhote, a 200-year old Swiss private bank, last year launched a community of investors - heads of Swiss family and advisory offices and wealth managers - with the aim of co-investing in the kind of managers they wanted to invest in, either by way of s

  5. K2 Advisors : Why We Like Activist Hedge Fund Strategies and Some Thoughts on Alpha[more]

    Matthias Knab, Opalesque: Rob Christian, Senior Managing Director, Head of Research K2 Advisors, Franklin Templeton Solutions, writes on Harvest Exchange: When d