VanEck International Gold Fund
Overview
The VanEck International Gold Fund (GGL) is an actively managed exchange-traded fund (ETF) that provides investors with exposure to physical gold bullion held in London vaults. The Fund seeks to track the performance of the price of gold while offering investors the convenience and diversification of an ETF.
Investment Objective
The primary investment objective of GGL is to provide investors with long-term capital appreciation through investments in physical gold bullion. The Fund does not attempt to track any specific benchmark but rather aims to reflect the fluctuations in the price of gold as closely as possible.
Investment Strategy
GGL invests primarily in unallocated gold bullion bars held in custody at various vaults in London, England. The Fund’s custodian is authorized to lend the gold bars to approved financial institutions. The proceeds from any lending activity are used to generate additional income for the Fund.
Benefits
* Gold Price Exposure: GGL provides investors with exposure to the price of gold, which is often considered a safe haven asset during periods of economic uncertainty.
* Diversification: Gold can help diversify an investment portfolio, as its price often moves independently of traditional asset classes such as stocks and bonds.
* Convenience: ETFs offer the convenience of buying and selling shares on a stock exchange, making them more accessible than investing in physical gold.
* Transparency: The Fund’s holdings are disclosed daily, providing investors with transparency into the underlying assets.
Risks
* Gold Price Volatility: The price of gold is volatile and can fluctuate significantly over time. This volatility can lead to large swings in the Fund’s net asset value (NAV).
* Currency Risk: GGL’s holdings are denominated in U.S. dollars. Investors outside the U.S. may face currency risk if the U.S. dollar appreciates or depreciates against their local currencies.
* Custodial Risk: The Fund’s gold bars are held in custody at vaults outside the U.S. There is a risk that the custodian may become insolvent or fail to protect the Fund’s assets.
Suitability
GGL is suitable for investors who believe that gold has a place in their portfolios as a diversification tool or a hedge against inflation. Investors should be aware of the risks associated with investing in gold and should consider their own investment objectives and tolerance for risk before investing in the Fund.
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