Vanguard doesn’t have an exchange traded fund (ETF) for gold or silver, which apparently suits founder John Bogle just fine.
“There’s a speculative binge going on in gold and certainly in silver,” Bogle told Fox Business earlier this week.
Precious metals ETFs such as SPDR Gold Shares (NYSEArca: GLD) and iShares Silver Trust (NYSEArca: SLV) were flat after some early swings Wednesday. The silver ETF fell about 4% the previous session, correcting after a strong rally.
Yet Bogle said the surge in gold and silver prices is “total speculation,” adding the metals don’t have “fundamental value” because they don’t create income or a flow of capital.
“So they’re just rank speculation,” Bogle asserted. “But speculations can go a lot further than you ever think they can go. So I wouldn’t ignore the possibility that they can keep going up and up for a while. But I think it’s going to be a case, as it usually is, that the higher they go, the more they fall at the end. So I’d say a real cautionary flag there.”
The folksy Vanguard founder is credited with popularizing passive investing and index funds with everyday investors. The firm’s largest ETF is Vanguard Total Stock Market ETF (NSYEArca: VTI) with nearly $20 billion in assets. It is structured as a separate share class of a Vanguard mutual fund.
iShares Silver Trust
Full disclosure: Tom Lydon’s clients own GLD and SLV.