Investors looking to ride out a volatile market may want to choose physical gold over gold stocks.
That's according to George Milling-Stanley, one of the world's gold experts and chief gold strategist at State Street Global Advisors.
“One of the reasons I own gold bullion is because I think it gives me some protection against potential weakness in the stock market,” Milling-Stanley told CNBC's “ETF Edge” this week. “When the stock market goes down, Gold mining stocks Remember, they are stocks, and they tend to fall with the general level of the stock market. So, they don't give me that extra level of protection.”
Milling-Stanley runs two exchange-traded funds that track the performance of the spot price of gold: SPDR Gold Equity Fund (gold) and SPDR Gold MiniShares Trust (Jaldam).
They are differentiated by their overall expense ratios – 0.40% for GLD and 0.10% for GLDM – and it is this key distinction that also differentiates the type of investor they attract, according to Milling Stanley.
“If you're someone who wants to trade…or if you want to be a tactical player – that means you need to be able to move very, very quickly – the liquidity of GLD after 20 years now means that its trading costs are very low compared to any other country,” he said. Another gold ETF. “If you have a million dollars and want to invest a million dollars in gold and leave it there, GLDM with its lower expense ratio makes more sense for you.”
As of Thursday's close, both GLD and GLDM were up 15% year to date.
Bullion, Bitcoin and Boomers
The idea is that gold “Vague” investing is no longer true, according to Milling Stanley. State Street's 2023 Gold ETF Impact Study found that millennials have larger portions of their portfolios allocated to gold than older generations.
The metal's popularity among young investors comes as Bitcoin continues to attract assets from both Millennials and Generation Z. A Policygenius survey published this week found that Millennials were more likely to own Bitcoin than any other generation, and Generation Z was more likely to own Bitcoin than any other generation. Another generation. Stocks, bonds or real estate.
But Milling Stanley backed away from the idea that gold and… Bitcoin They compete for assets across the board.
“Bitcoin may provide competition for people who want to take a tactical position in gold and wait for the price to go up and sell. I think bitcoin may provide competition there,” he said. “But I don’t think bitcoin really competes in terms of long-term strategic allocation, and that’s where I think gold really comes into play.”
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