Pure gold and miner ETFs give portfolios shine in unsure instances

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By Christiana Sciaudone – Gold has hit record highs recently. Are Gold ETFs Exaggerated?

Probably not, says Dan Weiskopf, portfolio manager at Toroso Investments, whose Twitter handle is @ETFProfessor.

"We are dealing with a world that has many unknowns," said Weiskopf in a telephone interview. "Gold is a good place for everyone's portfolio."

The US dollar could fall apart, the world relentlessly prints money. At some point, inflation will be required to repay it – may protect investors from this problem.

The question becomes how much and how to play metal, said Weiskopf. Both pure game ETFs and gold miner ETFs must be considered.

On the pure games: SPDR Gold Shares (NYSE 🙂 – the largest gold ETF in the world by assets of $ 77 billion and the largest ETF trading in commodities in the US – and SPDR Gold MiniShares (NYSE 🙂 essentially offer the same product. GLDM has approximately $ 3.3 billion in net worth and has the same sponsor. The difference is that each GLD share represents 1/10 of an ounce of gold versus 1/100 of an ounce of GLDM gold. In addition, the annual expense ratio of GLDM is 0.18% compared to 0.4% for GLD.

And that's key, said Todd Rosenbluth, head of ETF & Investment Fund Research at CFRA.

"GLD is the heavyweight. Institutional investors have been investing money here for a long time, but there are cheaper alternatives," Rosenbluth said in a telephone interview last week.

Not only does he point to GLDM, but GraniteShares Gold Trust (NYSE 🙂 – BAR, where the cost is about half that and the commitment is the same.

"For an individual investor who is unlikely to trade his size, GLDM, BAR and similar companies are extremely suitable means of gaining exposure to gold," said Rosenbluth.

When it comes to miners, Rosenbluth likes VanEck Vectors Gold Miners ETF (NYSE 🙂 – GDX, which includes Newmont Goldcorp Corp (NYSE :), Franco-Nevada Corporation (NYSE :), and Wheaton Precious Metals (NYSE :).

"We think the fundamentals for these companies look positive," said Rosenbluth.

The VanEck Vectors Junior Gold Miners ETF (NYSE 🙂 is a similar bet, but on companies with smaller market caps.

Rosenbluth points out that pure gold ETFs have less upside and downside potential than equity-based ETFs. For example, the GLD rose 25% over the past year, while the GDX rose 35% and the GDXJ rose 37%.

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