Comments on: Claymore Gold Bullion Trust (CGL.UN)

By: CanadianInvestor

CanadianInvestor — Wed, 03 Jun 2009 09:30:08 +0000

I don’t see how Claymore can claim the MER is capped at 0.50% when the term is nowhere defined in the Prospectus. The IFIC speaking on behalf of mutual funds in Canada defines MER to include fees like brokerage commissions … “The fund company’s administrative costs–including legal and accounting fees, brokerage fees and interest expenses–as well as GST costs comprise the remaining 20 percent of MER fees.” Best for me as an investor is some grand total of the cost, like Total Expense Ratio.

By: As Canadian Bank Earnings and Economy Go Down, Canadian Dollar is Up | MoneyEnergy

Fri, 29 May 2009 19:03:45 +0000

[...] Rob Carrick explains why you need to check your insurance if you’re doing home renovations. Actuary Riscario Insider talks about Canadian billionaire Seymour Schulich’s book Get Smarter. The Canadian Capitalist shares his views on the new Claymore Gold Bullion trust. [...]

By: Free Flight Deadline and Weekend Reading | Million Dollar Journey

Free Flight Deadline and Weekend Reading | Million Dollar Journey — Fri, 29 May 2009 10:31:23 +0000

[...] Canadian Capitalist details the Claymore gold bullion trust. [...]

By: Robert

Robert — Thu, 28 May 2009 13:28:37 +0000

GOLD UP NINE YEARS IN A ROW…

By: Kplus

Kplus — Thu, 28 May 2009 10:54:26 +0000

I would and do have gold in my portfolio to reduce risk, because it has no counter-party risk.

Martin Hutchinson has a similar view on gov’t bonds:http://www.moneymorning.com/2009/05/28/government-bonds-not-safe/

For myself, I would buy bonds from a government which does not devalue its currency.

As far as I know, that is none of them.

Your mileage may vary.
Kplus

By: Phil S

Phil S — Thu, 28 May 2009 03:29:10 +0000

@Bemerson. I agree but the way that I like to word it is that if you’re concerned about inflation, you should buy into the commodity that is CAUSING the inflation. Real estate, food & beverage, energy… They’re all the places to be… But, even though I like that sector, of course, I don’t want to overpay for those assets.

Food & beverage is my favorite commodity, but there aren’t very many different publicly listed investments to choose from. My next choice is Real Estate, which is where much more of my investment dollars have been allocated because there are a lot more choices. Energy is my 3rd choice and I do have holdings in that area as well.

By: Bemerson

Bemerson — Wed, 27 May 2009 19:02:07 +0000

I don’t see how you can view gold as being any different from any other commodity, like copper, wheat or oil. Who cares if it has any practical use? It has demand. It’s a physical asset with prices that fluctuates based on market conditions.

I think there are safer investments against inflation. Commodities (including gold), and equities hold up well under inflation. Gold is unique in that tends to do well during times of uncertainty. This is what makes it a good investment – because when the #$%^ hits the fan, everything else underperforms. Gold is there to keep your head above water when everything else is trying to pull you under.

Under normal circumstances, I wouldn’t keep more then 5-10% of any portfolio in Gold. Right now, I have 35% in gold (mostly miners), simply because I think it’s a good short/medium term investment that will pay out within the next year or two. Also because I’m young, and my portfolio is small, so I tend to make large bets. (I’m a bear market believer)

By: Phil S

Phil S — Wed, 27 May 2009 18:51:10 +0000

@Cam Birch. Yes, sort of… The link that you posted are for the $ 0.25 pieces which are collectible but circulating coins… Meaning they only have the 25 cent face value and are made of nickel.

When they first started the program, they were selling collectible 1-ounce gold and silver 20 dollar coins like the Maple Leaf coins, except that they were not sport-specific and promoted the 2010 Games in general. Those were NOT “circulating coins” and were made from precious metals and it was a limited edition run. I’m sure by now the Mint is all out of them… I used to be a coin collector when I was much younger, but I thought it might be good to have a few of those limited run gold coins, but I never was able to get any from my local RBC branch.

By: Canadian Capitalist

Canadian Capitalist — Wed, 27 May 2009 18:42:58 +0000

Re-reading the prospectus, I believe Som is correct. My apologies and I’m grateful for the correction. The MER is capped at 0.50% and I’ll update the post and enroll in English comprehension lessons.

By: Canadian Capitalist

Canadian Capitalist — Wed, 27 May 2009 16:53:39 +0000

Som: Thanks for your comments. The Management Fee is 0.50%; the operating expenses are capped at 0.50% but the cap excludes certain items noted in the post. MER = Management Fee + Operating Expenses, which could be between 0.50% and 1.0%. But the 0.50% MER is only possible if operating expenses are zero. I don’t see how that is possible given the charges involved in storing gold and insuring it.

IMO, correlation isn’t the only factor in considering an asset class in a portfolio. The other factor is long-term return expectations. On this score, gold’s real return expectation is zero. Not to mention, gold’s past record of hedging against inflation / deflation is spotty at best.