In a battle between the largest gold exchange traded fund and the biggest tech stock, which investment would get your vote? Would you choose gold because of the macroeconomic factors supporting the rise of the precious metal? Or do you put your money on Apple because of its overwhelming popularity?
As Christian Magoon notes in the Financial Advisor magazine, GLD and AAPL are each “in a sweet spot of late.” On Apple’s side of the ring, the beloved company just released its latest iPhone to a throng of queued customers. On gold’s side is the Federal Reserve, with its announcement of a third round of quantitative easing.
Investors shouldn’t “fight the Fed” this time, as GLD was declared the winner in the latest round. The gold ETF has been on a “performance hot streak,” as the price of gold increased nearly 9 percent in four weeks with the “anticipation and fruition of QE3,” says Magoon.
Precious metals stocks have also participated in this golden rally. As you can see below, the Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX) have increased considerably over the past month compared to AAPL. Gold stocks experienced a dip in August, but quickly reversed after the Fed provided the necessary nourishment to revive miners. Whereas Apple increased just 5 percent during the four weeks from August 24 through September 21, USERX and UNWPX climbed 15.7 percent and 16.4 percent, respectively, during the same timeframe.
We’re pleased to see gold stocks getting the respect and attention they have lacked over the past year. I’ve discussed numerous times how the price of the yellow metal has held up relative to gold miners, which have been dying on the vine.
In my opinion, this is only one of the factors which makes gold miners a greater opportunity for investors today. I talked about this phenomenon on Canada’s Business News Network, as well as a few specific companies I believe are worthy of a closer look.
For long-term investors, there should always be a place for a growing tech company like Apple in your portfolio. However, wise investors recognize that the potentially better opportunities offering significant growth and value wouldn’t always win the popularity contest.
Watch the discussion on BNN now.
Read the Financial Advisor article.
| One Month Return |
YTD | 1 Year |
5 Year |
10 Year |
Gross Expense Ratio |
|
|---|---|---|---|---|---|---|
| Gold and Precious Metals Fund (USERX) | 8.88% | -5.71% | -23.14% | 6.00% | 15.84% | 1.58% |
| World Precious Minerals Fund (UNWPX) | 8.91% | -10.93% | -28.94% | 0.02% | 15.77% | 1.69% |
| Apple (AAPL) | 8.92% | 64.26% | 72.87% | 36.93% | 56.85% | NA |
| FTSE Gold Mines Index | 8.78% | -11.17% | -26.20% | 5.19% | 9.60% | NA |
| NYSE Arca Gold Miners Index | 11.95% | -6.44% | -22.88% | 6.15% | 11.17% | NA |
| YTD | 1 Year |
5 Year |
10 Year |
Gross Expense Ratio |
|
|---|---|---|---|---|---|
| Gold and Precious Metals Fund (USERX) | -14.27% | -22.95% | 3.14% | 12.95% | 1.58% |
| World Precious Minerals Fund (UNWPX) | -18.21% | -32.75% | -3.29% | 12.52% | 1.69% |
| Apple (AAPL) | 44.20% | 73.98% | 36.72% | 51.95% | NA |
| FTSE Gold Mines Index | -15.83% | -20.73% | 4.72% | 8.62% | NA |
| NYSE Arca Gold Miners Index | -12.72% | -17.26% | 4.50% | 10.21% | NA |
Expense ratios as stated in the most recent prospectus. Performance data quoted above is historical. Past performance is no guarantee of future results. Results reflect the reinvestment of dividends and other earnings. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance does not include the effect of any direct fees described in the fund’s prospectus (e.g., short-term trading fees of 0.50%) which, if applicable, would lower your total returns. Performance quoted for periods of one year or less is cumulative and not annualized. Obtain performance data current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.
Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.
Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5 percent to 10 percent of your portfolio in these sectors.
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Holdings in the Gold and Precious Metals Fund and the World Precious Minerals Fund as a percentage of net assets as of 6/30/2012: Apple 0.00%; SPDR Gold Trust ETF (Gold and Precious Metals Fund 1.25%, World Precious Minerals Fund 1.44%); iShares COMEX Gold Trust 0.00%; Physical Asian Gold Shares ETF 0.00%; Securities Swiss Gold Shares ETF 0.00%.
