As investors look for ways to better manage risk and returns, one option could be through adding gold to a portfolio. The yellow metal has historically moved in the opposite direction of the stock market and is often perceived as a safe haven asset. There are many ways to invest in gold: through miners, explorers, physical gold, ETFs and more.
On the upcoming webcast, Hedging Against Volatility: Should You Consider Gold?, Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors, and Robert Moriarty, Founder of 321Gold.com, will take a deep dive into investing in gold, highlighting a fund strategy, plus royalty and streaming companies, which many consider to be the “smart money” of the space.
For instance, the U.S. Global GO GOLD and Precious Metal Miners ETF (NYSEArca: GOAU) may be a smarter way for investors to capture the gold mining space. The U.S. Global GO GOLD and Precious Metal Miners ETF is a smart beta offering that tracks a specialized or rules-based index to help hone in on quality players in the gold mining space. The underlying U.S. Global GO GOLD and Precious Metal Miners Index uses quantitative analysis to pick stocks, with a particular focus on royalty companies.
The ETF also includes a 30% tilt to royalty and streaming companies, which could help investors better manage common risks associated with traditional producers, such as building and maintaining mines, among others. The lower risk may also diminish risk since royalty companies have historically rewarded investors by increasing dividends at a faster pace than the broader equity market.
According to U.S. Global, royalty companies are a superior way to target the gold mining segment. Royalty companies are not responsible for costly infrastructure so huge operating expenses can be avoided. These companies hold highly diversified portfolios of mines and other assets to mitigate concentration. Additionally, they generate some of the highest revenue per employee of all public companies while growing cash flows and dividends.
Financial advisors who are interested in learning more about the gold space can register for the Thursday, June 27 webcast here.