Gold has a dual nature as it is both an investment and a consumer good. Gold’s diverse sources of demand, both cyclical and counter cyclical, have been the source of its low historical correlation to financial assets and its unique ability to provide key strategic benefits to the overall portfolio including:
Long-term Returns: Gold has delivered a 7.7% compound annual growth rate in USD terms since 15 August 1971, the day U.S. President Richard Nixon removed USD from the gold standard. Gold has historically provided positive risk adjusted-returns over time.1
Diversification: Gold has demonstrated a low and negative correlation to many financial asset indices over time and has a track record of providing a hedge during periods of large market drawdowns, systemic risk, and geopolitical volatility.2
Liquidity: Global gold market liquidity is on par with major debt, currency, and equity markets. The average daily turnover of gold is over US$145 billion.3
Portfolio Impact: Adding an allocation to gold may potentially provide increased diversification, reduce portfolio drawdowns, and increase
portfolio efficiency through higher risk-adjusted returns.4
As investors increasingly look to gold ETFs, we answer 10 key questions to consider when investing in SPDR Gold Shares Singapore dollar (SGD) trading counter.
1 Bloomberg Finance, L.P., and State Street Global Advisors, as of 31 March, 2021. Gold returns are measured by the LBMA Gold Price PM (US$/oz).
2 Bloomberg Finance, L.P., State Street Global Advisors; as of 31 March, 2021.
3 Bloomberg Finance, L.P., State Street Global Advisors; as of 31 March, 2021.
4 Bloomberg Finance, L.P., State Street Global Advisors; as of 31 March, 2021.
All the information contained on this web page is as of date indicated unless otherwise noted. All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
Frequent trading of ETF's could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.
Diversification does not ensure a profit or guarantee against loss.
There can be no assurance that a liquid market will be maintained for ETF shares.
These investments may have difficulty in liquidating an investment position without taking a significant discount from current market value, which can be a significant problem with certain lightly traded securities. Investing in commodities entail significant risk and is not appropriate for all investors. Commodities investing entail significant risk as commodity prices can be extremely volatile due to wide range of factors. A few such factors include overall market movements, real or perceived inflationary trends, commodity index volatility, international, economic and political changes, change in interest and currency exchange rates.
Nothing contained herein constitutes investment advice and should not be relied upon as such. The prospectus in respect of the Singapore offer of the shares in the SPDR Gold Trust (the 'Trust') is available and may be obtained upon request from State Street Global Advisors Singapore Limited ("SSGA") (Co. Reg. No: 200002719D). Investors should read the prospectus of the Trust before deciding whether to purchase SPDR Gold shares (the 'Shares'). Shares in the Trust are not obligations of, deposits in, or guaranteed by, World Gold Trust Services, LLC, SSGA or any of their affiliates. You may wish to seek advice from a financial adviser before making a commitment to purchase Shares. In the event that you choose not to seek advice from a financial adviser, you should consider whether the Trust is suitable for you. Investors have no right to request the Sponsor to redeem their Shares while the Shares are listed. It is intended that holders of Shares may only deal in their Shares through trading on the SGX-ST. Listing of the Shares on the SGX-ST does not guarantee a liquid market for the Shares.
The value of Shares relates directly to the value of gold held by the Trust (less expenses) and fluctuations in the price of gold could materially and adversely affect an investment in the Shares. The Trust does not generate any income and as the Trust regularly sells gold to pay for its ongoing
expenses, the amount of gold represented by each Share will decline over time to that extent. The price received upon the sale of the Shares, which trade at market price, may be more or less than the value of gold represented by them. The value of Shares may fall as well as rise. An investment in Shares is subject to investment risks, including the possible loss of the principal amount invested. Past performance of the Trust or of the gold market are not necessarily indicative of the future performance of the Trust.
This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.