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An easy way to hold gold

by , 13 March 2015

Many investors like to hold a small portion of their investment portfolio in gold.

It acts like a kind of investment insurance. If the market crashes, gold tends to benefit from its safe haven status and this can provide stability to your portfolio.

So what's the best way to invest in gold?

Read on to find out…

How to invest in gold

When it comes to investing in gold, to gain exposure to the yellow metal you have a few options.

You could opt to invest in physical gold through Kruger rands, other gold coins and bars. But for some investors, the risks of having to ensure the security of physical gold doesn’t appeal.

If you invest in gold producers and other companies within the industry, there are a whole host of things that influence them. So if you’re looking for gold exposure, they’re perhaps not the best route.

Another option you have is to invest in an exchange traded fund (ETF) that gives you exposure to gold, such as the Absa NewGold ETF.

Through investing in this ETF, you get exposure to gold without having to hold it yourself. If you’re looking for a long-term investment in gold, it’s worth considering.

How this gold-backed ETF works

The NewGold ETF is backed entirely by physical gold that lies in a vault in London. Unlike many ETFs on the market, it actually has the physical backing.

Many commodity ETFs are backed by paper notes. These promise that the ETF issuer will give you the gold, or whatever the commodity is, should you want it.

With NewGold’s ETF in a vault in London, it means that it’s safe.

This gives this ETF a number of advantages:

  • You have exposure to physical gold without holding it yourself, so it’s convenient;
  • If you hold a big enough holding in the ETF and with the necessary permits, you can redeem your ETFs for gold.
  • The ETF is only backed by physical gold, nothing else.

Bottom line: If you’re looking for an easy way to own gold, this ETF is worth considering.

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An easy way to hold gold
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