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 GOLDETF (0828EA), Buy Gold like u buy shares

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TSCubalagi
post Dec 6 2017, 10:38 PM, updated 3y ago

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Gold ETF by Affin Hwang Asset Management was listed today.

This is positive development for stock punters. We now can buy Gold like we buy shares, in our CDS account.

Price closed at RM1.74 with 8,271 lots being traded. 1 lot (100 shares) equal to 1 gm of Gold.

Can discuss when good time to buy Gold?

This post has been edited by Cubalagi: Dec 6 2017, 10:39 PM
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post Dec 15 2017, 09:32 PM

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This is great news, wish Silver ETF would also be made available.
TSCubalagi
post Dec 17 2017, 11:21 PM

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I believe money from bitcoin will start to flow to physical assets especially gold soon.
TSCubalagi
post Jul 19 2019, 11:50 AM

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I just found back this thread that I opened 2 years ago.. Forgot I opened it, due to poor response 😆

I hv been holding some of this "stock" a while but end of last year I double my holdings due to what I perceive as higher risks of economic disaster.

I think I want to promote more ppl to look at this, it tracks price of gold, which is now slowly going up again. Globally central banks are cutting interest rates, this causes currency to fall. Ppl are saying there is a currency war going on on top of a trade war. Gov wants their currency to go lower to maintain export competitiveness. In such scenario, gold being the "neutral" currency will naturally go up.

https://www.kitco.com/news/2019-07-17/Gold-...che-Bank.htmlhe

Goldetf is up 16% in 1 year and 11% YTD.

This is more convinient way to buy and sell gold as its in the same Bursa trading platform n transaction is fast, costs is low with no stamp duty.

This post has been edited by Cubalagi: Jul 19 2019, 12:31 PM
[Ancient]-XinG-
post Jul 19 2019, 12:57 PM

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Better than hellogold I suppose.

Any fees?
Jordy
post Jul 19 2019, 01:20 PM

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QUOTE(Ancient-XinG- @ Jul 19 2019, 12:57 PM)
Better than hellogold I suppose.

Any fees?
*
It is just your normal trading fees. Annual management fee is around 0.8% as I have read somewhere before.

Since the IPO closing of 1.74 to current price of 1.945 (19 months), the return is only 11.78%, with most of the gains coming from June 2019 onward. Might not be worth to look at if gold price is going to be volatile.
TSCubalagi
post Jul 19 2019, 01:48 PM

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QUOTE(Ancient-XinG- @ Jul 19 2019, 12:57 PM)
Better than hellogold I suppose.

Any fees?
*
Pay normal brokerage like a stock.

I suggest use online cash upfront (like Rakuten 0.1%) for lowest transaction costs. Also no stamp duty but watch out for the min brokerage.
TSCubalagi
post Jul 19 2019, 02:04 PM

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QUOTE(Jordy @ Jul 19 2019, 01:20 PM)
It is just your normal trading fees. Annual management fee is around 0.8% as I have read somewhere before.

Since the IPO closing of 1.74 to current price of 1.945 (19 months), the return is only 11.78%, with most of the gains coming from June 2019 onward. Might not be worth to look at if gold price is going to be volatile.
*
Annual management fee is 0.3% and custody fee is 0.2% per anum. So total is 0.5%.The gold is kept in Singapore but the units will appear in your Bursa CDS account.

The stock is 99% invested in real physical gold bars. So performance will track price of gold obviously. it was going nowhere from IPO until end of last year. But with trade war, interest rate easing, fear of crisis, Gold has been moving upwards.

So depend on your future outlook. Strong economic growth and high interest rates are bad for gold. Gold doesn't pay any dividends and interest. Crisis and low interest rates are good for Gold.

But even if you bullish on the economy, I think you should have some gold for "insurance" in case you are wrong.

What I like most is that it's on the same platform as my trading account. When I take profit from a stock I can immediately buy some Gold vice-versa.

This post has been edited by Cubalagi: Jul 19 2019, 02:08 PM
Jordy
post Jul 19 2019, 04:00 PM

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QUOTE(Cubalagi @ Jul 19 2019, 02:04 PM)
Annual management fee is 0.3% and custody fee is 0.2% per anum. So total is 0.5%.The gold is kept in Singapore but the units will appear in your Bursa CDS account.

The stock is 99% invested in real physical gold bars. So performance will track price of gold obviously. it was going nowhere from IPO until end of last year. But with trade war, interest rate easing,  fear of crisis, Gold has been moving upwards.

So depend on your future outlook. Strong economic growth and high interest rates are bad for gold. Gold doesn't pay any dividends and interest. Crisis and low interest rates are good for Gold.

But even if you bullish on the economy, I think you should have some gold for "insurance" in case you are wrong.

What I like most is that it's on the same platform as my trading account. When I take profit from a stock I can immediately buy some Gold vice-versa.
*
Thank you for your clarification on the annual management fee.

"The stock is 99% invested in real physical gold bars. So performance will track price of gold obviously"
This one I agree. So coming back to the direction of spot gold price. The swing is too wild if we look at the previous 10Yr chart. No doubt that there is a chance to hit one of the up cycles of gold price, but that will be during a time of recession. If we take a look at the current gold price, it is at it's all-time high right now. I believe that the recent surge in gold price is due to China's buying spree since the start of the year.

The questions we need to ask ourselves are, how long can it hold at its current valuation, how long is our big brother China going to sustain their buying spree, and the most fundamental question would be how long will the US keep its interest rate low?

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TSCubalagi
post Jul 19 2019, 04:58 PM

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QUOTE(Jordy @ Jul 19 2019, 04:00 PM)
The questions we need to ask ourselves are, how long can it hold at its current valuation, how long is our big brother China going to sustain their buying spree, and the most fundamental question would be how long will the US keep its interest rate low?

*
Yes, gold is now at historical highs in MYR terms.Thanks for sharing the chart. A 20 year time frame will show you an even more interesting picture.

But for sake of discussion, let me try to answer ur questions:

Q: How long will it keep its current valuation?

Ans: No idea. There is no comparative industry PE or EPS or a as such. Gold is..just gold. If we can tell exactly, than we can make millions by trading gold futures instead.

Q: How long will big Brother China going to continue its buying spree?

Ans: I think as long as the China-US rivalry persists.. which is going to be a long time. China problem is that they have too much of their money held in US Treasuries. Imagine if all ur money is with ur enemy.. Who is now starting to get aggressive with u. Problem right? They are trying to diversify away gradually, but since we are talking trillions of dollars, they can't pull out quickly without losing money themselves.

https://www.cnbc.com/2019/05/16/china-has-c...two-years.html:

Q: How long will the US keep their interest rate low?

Ans: They have been increasing interest rates for the past 2 years. Early this year, they said enuff increase! Now everyone is expecting the first cut to come end of this month. The expectation is that this is the first cut of many to follow. To answer your question, I would say about 1-2 years.

This post has been edited by Cubalagi: Jul 19 2019, 05:34 PM
[Ancient]-XinG-
post Jul 19 2019, 09:37 PM

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QUOTE(Jordy @ Jul 19 2019, 01:20 PM)
It is just your normal trading fees. Annual management fee is around 0.8% as I have read somewhere before.

Since the IPO closing of 1.74 to current price of 1.945 (19 months), the return is only 11.78%, with most of the gains coming from June 2019 onward. Might not be worth to look at if gold price is going to be volatile.
*
QUOTE(Cubalagi @ Jul 19 2019, 01:48 PM)
Pay normal brokerage like a stock.

I suggest use online cash upfront  (like Rakuten 0.1%) for lowest transaction costs. Also no stamp duty but watch out for the min brokerage.
*
QUOTE(Jordy @ Jul 19 2019, 04:00 PM)
Thank you for your clarification on the annual management fee.

"The stock is 99% invested in real physical gold bars. So performance will track price of gold obviously"
This one I agree. So coming back to the direction of spot gold price. The swing is too wild if we look at the previous 10Yr chart. No doubt that there is a chance to hit one of the up cycles of gold price, but that will be during a time of recession. If we take a look at the current gold price, it is at it's all-time high right now. I believe that the recent surge in gold price is due to China's buying spree since the start of the year.

The questions we need to ask ourselves are, how long can it hold at its current valuation, how long is our big brother China going to sustain their buying spree, and the most fundamental question would be how long will the US keep its interest rate low?

Attached Image
*
the surge of gold are mainly due to the anticipating of recession I suppose. But the volatility is high.
Investing in gold can be act as a hedge because the correlation to main market is low.
But given the uncertainty of current market movement, even gold is not safe anymore.
Its already very high at the mean time, can it breach further?
Nevertheless, we can give it a try for not exceeding 10% of our portfolio, perhaps?

TSCubalagi
post Jul 19 2019, 10:43 PM

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QUOTE(Ancient-XinG- @ Jul 19 2019, 09:37 PM)
the surge of gold are mainly due to the anticipating of recession I suppose. But the volatility is high.
"Volatility is high". High compared to what I may ask?

Compared to FD?
Yes

Compared to Govt bonds?
Yes

Compared to stocks?:
Nope..Gold is much less volatile (and this is a stock exchange section.. So ppl should be used to volatility! ).

If u compare big crashes.. the gold crash in 2012-2013 was 27% down (in RM terms). Compare that to the 56% crash of SnP500 and 40% crash of KLCI in 2008. N of course, can't even compare with individual stock volatility, where possible to drop 30% in one day.

The solution to manage the risk as always is to have a well diversified portfolio n never to put all ur eggs in one basket. The great thing about gold is its low corelation to equities. So it's a good hedge/insurance. I definitely sleep better with my stock portfolio knowing that I have some gold.

This post has been edited by Cubalagi: Jul 20 2019, 12:24 AM
Jordy
post Jul 20 2019, 11:04 AM

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QUOTE(Cubalagi @ Jul 19 2019, 04:58 PM)
Yes, gold is now at historical highs in MYR terms.Thanks for sharing the chart. A 20 year time frame will show you an even more interesting picture.

But for sake of discussion, let me try to answer ur questions:

Q: How long will it keep its current valuation?

Ans: No idea. There is no comparative industry PE or EPS or a as such. Gold is..just gold. If we can tell exactly, than we can make millions by trading gold futures instead.

Q: How long will big Brother China going to continue its buying spree?

Ans: I think as long as the China-US rivalry persists.. which is going to be a long time. China problem is that they have too much of their money held in US Treasuries. Imagine if all ur money is with ur enemy.. Who is now starting to get aggressive with u. Problem right? They are trying to diversify away gradually, but since we are talking trillions of dollars,  they can't pull out quickly without losing money themselves.

https://www.cnbc.com/2019/05/16/china-has-c...two-years.html:

Q: How long will the US keep their interest rate low?

Ans: They have been increasing interest rates for the past 2 years. Early this year, they said enuff increase!  Now everyone is expecting the first cut to come end of this month. The expectation is that this is the first cut of many to follow. To answer your question, I would say about 1-2 years.
*
Thank you for sharing your insights, and yes the past 20 years chart did tell a very interesting picture, but I am not going to go that far as we know gold price will never rally up in that way again (it was a huge 400% surge over the period). From where we are, a steady 5% increment in price annually is good enough, but then again we wouldn't know what is going to happen over the next 5 years or so.

US re-election is coming next year, so things might get interesting with the China-US rivalry. If he losses office, well it wouldn't take a long time for the new Government to reverse the damage Trump did with China. So on to your claim that this is going to be a long drawn affair, I'd say we'll let the US voters to decide if they would like to see this rivalry persist.

While I agree that US would have its first rate cut in years, but would this short-term rate cut spur a long-term rally of the gold price? It is highly unlikely as Fed will need to step in once again with a rate hike if inflation rises too rapidly due to cheap credit. So when that happens, gold would become more of a speculative tool rather than a hedging tool.

One downside of this GOLDETF is its very low liquidity. One is "forced" to liquidate it at a cheap price or stick with the stock through its ups and downs. And the fact that is pays no dividends, the only way to earn a decent profit from this ETF is if the price could achieve a compounded growth rate of 5% (which is again, unlikely unless the US is hit with another big recession). As compared to my stocks portfolio, I would be able to sleep better at night as I know that my stocks would still continue giving me dividends for years to come even if the price compressed temporarily.

QUOTE(Ancient-XinG- @ Jul 19 2019, 09:37 PM)
the surge of gold are mainly due to the anticipating of recession I suppose. But the volatility is high.
Investing in gold can be act as a hedge because the correlation to main market is low.
But given the uncertainty of current market movement, even gold is not safe anymore.
Its already very high at the mean time, can it breach further?
Nevertheless, we can give it a try for not exceeding 10% of our portfolio, perhaps?
*
Wow, 10% of total portfolio? That is a bit too much, isn't it? sweat.gif
Then I would have many sleepless nights afterwards. Haha.
TSCubalagi
post Jul 20 2019, 12:00 PM

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QUOTE(Jordy @ Jul 20 2019, 11:04 AM)
Wow, 10% of total portfolio? That is a bit too much, isn't it? sweat.gif
Then I would have many sleepless nights afterwards. Haha.
*
I increase end last year and now a bit more than 10% gold. Up from 2-3% a year ago. Gain of 12% so far. 10% is my standard limit when buying any single stock, but there could be exceptions. I'm a self confessed market timer, so right now waiting for the signs.. 😆

Liquidity and traded volume are two different things. Liquidity for 0828EA is there due to market maker. But volume is not, maybe ppl not aware or don't understand.

N if u want big amounts u can call the fund manager to help. They can bring the liquidity. But what's more cool is that if u own 500000 units, then u can actually exchange your units to get a physical 5kg gold bar 9999.

This post has been edited by Cubalagi: Jul 20 2019, 12:01 PM
moosset
post Jul 20 2019, 12:42 PM

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QUOTE(Jordy @ Jul 20 2019, 11:04 AM)
Wow, 10% of total portfolio? That is a bit too much, isn't it? sweat.gif
Then I would have many sleepless nights afterwards. Haha.
*
I think 5% to 10% is the recommended amount, although I only have less than 1% gold due to StashAway.

QUOTE(Cubalagi @ Jul 20 2019, 12:00 PM)
But what's more cool is that if u own 500000 units,  then u can actually exchange your units to get a physical 5kg gold bar 9999.
*
how's much is the transaction cost to exchange it to physical gold? and what type of gold? Swiss? Kijang Emas?
Jordy
post Jul 20 2019, 12:54 PM

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QUOTE(Cubalagi @ Jul 20 2019, 12:00 PM)
I increase end last year and now a bit more than 10% gold. Up from 2-3% a year ago. Gain of 12% so far. 10% is my standard limit when buying any single stock, but there could be exceptions. I'm a self confessed market timer, so right now waiting for the signs.. 😆

Liquidity and traded volume are two different things. Liquidity for 0828EA is there due to market maker. But volume is not, maybe ppl not aware or don't understand.

N if u want big amounts u can call the fund manager to help. They can bring the liquidity. But what's more cool is that if u own 500000 units,  then u can actually exchange your units to get a physical 5kg gold bar 9999.
*
QUOTE(moosset @ Jul 20 2019, 12:42 PM)
I think 5% to 10% is the recommended amount, although I only have less than 1% gold due to StashAway.
how's much is the transaction cost to exchange it to physical gold? and what type of gold? Swiss? Kijang Emas?
*
I still cannot take that kind of risk to have such a high exposure to gold. Maybe small amount like RM10k, probably is still ok, but to put 10% of my portfolio in gold holdings, not a good idea at this current condition. That would mean sacrificing my stable dividends in exchange for something uncertain.
TSCubalagi
post Jul 20 2019, 12:58 PM

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QUOTE(moosset @ Jul 20 2019, 12:42 PM)
how's much is the transaction cost to exchange it to physical gold? and what type of gold? Swiss? Kijang Emas?
*
Im told its nominal if u arrange the pick up in Singapore yourself. The custodian will transfer the gold bar to your name and your shares in Bursa will be canceled.

I hv no idea on the gold manufacturer, but I think it could be from different sources provided it's LBMA certified.

http://www.lbma.org.uk/good-delivery-list



moosset
post Jul 20 2019, 01:45 PM

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QUOTE(Jordy @ Jul 20 2019, 12:54 PM)
I still cannot take that kind of risk to have such a high exposure to gold. Maybe small amount like RM10k, probably is still ok, but to put 10% of my portfolio in gold holdings, not a good idea at this current condition. That would mean sacrificing my stable dividends in exchange for something uncertain.
*
so that means you don't think a financial crisis or a recession is coming?

Most ppl say it's coming ....because it has been almost 10 years. sad.gif

on the other hand, gold has already appreciated a lot this year.... not sure if I'd acquire more.
Jordy
post Jul 20 2019, 06:27 PM

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QUOTE(moosset @ Jul 20 2019, 01:45 PM)
so that means you don't think a financial crisis or a recession is coming?

Most ppl say it's coming ....because it has been almost 10 years.  sad.gif

on the other hand, gold has already appreciated a lot this year.... not sure if I'd acquire more.
*
Well, I would not speculate if a crisis or recession is coming or not as I am not an economist. So my views of the economical health are not important. But what I am saying is that my defensive portfolio is able to withstand a recession/crisis in the US. Well IF a recession/crisis was to happen, I could still buy gold then and ride with it. But right now with no clearer sign of it, I would not risk my cash earning nothing.
moosset
post Jul 20 2019, 11:48 PM

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QUOTE(Jordy @ Jul 20 2019, 06:27 PM)
Well, I would not speculate if a crisis or recession is coming or not as I am not an economist. So my views of the economical health are not important. But what I am saying is that my defensive portfolio is able to withstand a recession/crisis in the US. Well IF a recession/crisis was to happen, I could still buy gold then and ride with it. But right now with no clearer sign of it, I would not risk my cash earning nothing.
*
eh, care to explain your defensive portfolio?
can withstand a recession / crisis even without gold? hmm.gif

If you buy it then, wouldn't it be too late? I think buying during recession/crisis may be too late. The price would have gone up by then, no? I think we should buy before others join the bandwagon. (should buy if you're expecting a crisis, if not, then no need)

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