Investors looking to ride out a volatile market may want to choose physical gold over gold stocks.
That’s what George Milling-Stanley, one of the world’s leading gold experts and chief gold strategist at State Street Global Advisors, says.
“One of the reasons I own gold bullion is because I believe it gives me some protection against possible weakness in the stock market,” Milling-Stanley told CNBC’s “ETF Edge” this week. “When the stock market falls, Gold mining stocks Remember that these are stocks and that they tend to decline with the general level of the stock market. So they don’t give me that extra protection.”
Milling-Stanley’s company operates two exchange-traded funds that track the spot price of gold: the SPDR Gold Shares ETF (GLD) and SPDR Gold MiniShares Trust (GLDM).
They are differentiated by their gross expense ratios – 0.40% for GLD and 0.10% for GLDM – and it is this key difference that also differentiates the type of investors 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 have to be able to move very, very quickly – then the liquidity of GLD after 20 years means that “Very, very important is “low trading costs compared to any other gold ETF,” he said. “If you have a million dollars and want to invest a million dollars in gold and leave it out there, then GLDM, with its lower expense ratio, makes more sense for you.”
As of Thursday’s close, GLD and GLDM were each up 15% year to date.
Gold bars, Bitcoin and boomers
The idea that gold According to Milling-Stanley, a “fuddy-duddy” investment is no longer true. State Street’s 2023 Gold ETF Impact Study found that Millennials invested a larger portion of their portfolios in gold than older generations.
The metal’s popularity among younger investors comes as Bitcoin continues to attract assets from both Millennials and Generation Z. A Policygenius survey released this week found that Millennials are more likely to own Bitcoin than any other generation, and that Generation Z is more likely to own Bitcoin than stocks, bonds or real estate.
But Milling-Stanley rejected the idea that gold and Bitcoin compete for assets across the board.
“Bitcoin could well be competition for those people who want to take a tactical position in gold and just wait for the price to rise and sell. I think Bitcoin could definitely offer 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 its own.”
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2024-04-11 23:00:01
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