VanEck Talks Gold, Value of Preferred Securities | ETF Trends

With gold trending year-to-date, Brandon Rakszawski, ETF Product Manager for VanEck, spoke with ETF Trends about the firm’s strategies to help in keeping an eye on gold. This means looking to ETF exposure for this area, as well as the proper value and allocation that will deliver on yield.

To get into this, it means looking at retail and financial advisor world. Miners products and gold bullion ETF exposure is important as well, which has been a solid result from a recent partnership between VanEck and Merk for redeemable gold bullion ETFs such as the VanEck Merk Gold Trust (OUNZ).

There’s been a lot of interest in gold, in general, as of late. This means continuing to put out content in that regard, and keeping an eye on the markets when it comes to increased interest with risk and more

That topic leads into one of VanEck’s real assets, allocation strategy. This looks holistically at the entire real asset market on a monthly basis. It uses a good deal of indicators to determine allocations long and flat, or cash to various segments of the real asset space.

Just at the beginning of October, the model triggered more of a defensive positioning. As a result, some cash was raised. It had been long for a few months in most of the real assets’ segments, making it interesting to watch, as there’s a decent gauge for real assets across the board, from real estate to mining companies.

“It’s definitely something to keep an eye on and I think it ties into a lot of different themes such as trade talks global growth and other areas that everyone’s talking about,” Rakszawski states.

Alternative Yield Products

Additionally, income and yield continue to come through on the inbound lines. With questions about income products, specifically in regards to alternative income or alternative yield products. Moreover, outside of traditional fixed income, a lot of investors are interested in preferred securities. Across the board, there are many types of offerings.

The VanEck Vectors Preferred Securities ex Financials ETF (PFXF) has proven to be interesting, as it excludes what dominates most other preferred indexes and ETFs, the traditional financial preferred securities. It actually comes with some interesting features.

As a lot of people are concerned about call risk, most preferred securities are generally callable. Additionally, with interest rates lowering, there’s concern over companies calling and reissuing at lower rates.

Related: Market Increase For Gold In Step With VanEck’s Expectations 

This has proven to be an interesting topic, as investors seem to have lots of questions regarding the profile of the call schedule for the underlying preferred securities in the PFXF, which tends to be further out in the future, as a smaller percentage of preferred securities are callable.

“Preferred securities continue to get more interest than all of these other higher-yielding equity products. Those are some of the major trends we are seeing right now.”

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