Investors may find that opting for physical gold over gold stocks is a better choice in a volatile market, according to George Milling-Stanley, a leading expert in gold and the chief gold strategist at State Street Global Advisors. He explained that owning gold bars can offer protection against potential weaknesses in the equity market, unlike gold mining stocks, which tend to move in line with the general equity market.
Milling-Stanley’s firm manages two exchange-traded funds that track the spot price of gold: the SPDR Gold Shares ETF (GLD) and SPDR Gold MiniShares Trust (GLDM). The key difference between these two funds is their gross expense ratios – 0.40% for GLD and 0.10% for GLDM. This difference in costs attracts different types of investors, with GLD being more suitable for traders due to its liquidity and low trading costs, while GLDM is more suitable for long-term investors due to its lower expense ratio.
As of Thursday, both GLD and GLDM had seen a 15% increase year to date. Millennials are showing a greater interest in gold investments, with more of them allocating portions of their portfolios to gold compared to older generations. This shift comes as bitcoin attracts assets from millennials and Generation Z. Despite competition from bitcoin, Milling-Stanley believes that gold and bitcoin serve different purposes, with gold being more suited for long-term strategic investments.
It’s important to note the Disclaimer provided in this content.
Investors looking to navigate a volatile market may find physical gold to be a safer option compared to gold stocks, according to George Milling-Stanley, a leading expert in gold and the chief gold strategist at State Street Global Advisors. He believes that owning physical gold bars provides protection against potential weaknesses in the equity market, as gold mining stocks tend to follow the general trend of the equity market and may not offer the same level of protection.
State Street Global Advisors offers two exchange-traded funds that track the performance of the spot price of gold: the SPDR Gold Shares ETF (GLD) and SPDR Gold MiniShares Trust (GLDM). GLD has a higher gross expense ratio of 0.40% compared to GLDM’s 0.10%. Milling-Stanley suggests that those looking to trade frequently or be tactical in their investments may prefer GLD due to its liquidity and low trading costs, while investors looking for a long-term strategic allocation may find GLDM more suitable due to its lower expense ratio.
Despite the perception that gold is a traditional investment favored by older generations, State Street’s 2023 Gold ETF Impact Study found that millennials have a higher allocation to gold in their portfolios compared to other age groups. This shift in perception may be attributed to the rising popularity of bitcoin among younger investors. However, Milling-Stanley believes that gold and bitcoin are not directly competing with each other, as bitcoin may cater to those looking for short-term gains while gold is better suited for long-term strategic allocations.
In conclusion, investors may consider investing in physical gold as a means of protecting their portfolios during volatile market conditions. State Street Global Advisors offers two gold ETFs, each catering to different types of investors based on their trading preferences. Despite the increasing popularity of bitcoin, gold remains a valuable asset for long-term strategic allocations.
Source link
