CNBC’s Bob Pisani wished the SPDR Gold Shares ETF (GLD) a happy 15th birthday during ETF Edge earlier this week and went on to discuss how gold is tracking and what else to keep an eye on.
As Pisani makes clear, gold has has been very successful when it comes to the ETF concept, and in terms of what else there is to say about the precious metal, Dan Draper, global head of ETFs at Invesco, added how, from a diversified portfolio perspective, while a bit out of favor otherwise, still has a real place in a lot of portfolios for clients.
In the segment, ETF Trends CEO Tom Lydon remarked on the performance of gold, noting how in the past 15 years, GLD is up a lot more than the S&P 500. Lydon adds how much regular talk there is about buying gold for inflationary purposes.
“Back in 2007 to 2012, the price of gold went up three times during that period of time. We didn’t have any inflation. So back to Dan’s point, diversification is key. We’re starting to see more flows. And they’ve had $5 billion coming to GLD so far this year.”
What Gold Hedged Against
Pisani explains how ten years ago, some decried how gold ETFs were a hedge against inflation, and there wasn’t any inflation. However, now it’s proclaimed as a hedge against uncertainty, which is why it’s gone up so much.
Deemed an alternative investment that’s malleable, CFRA’s Todd Rosenbluth agrees, noting how gold has diversification benefits that sometimes those work, other times they don’t. However, Rosenbluth also explains how impressive it is for GLD to be doing so well from a flows perspective the year. It now has much cheaper competition.
“Whole hosts of products in the last three years have come to market that are from GraniteShares from a whole host of other providers that are cheaper, and yet GLD is a default product,” Rosenbluth states.
In addition to all of this, Pisani notes how this is a play on the Indian consumer, who makes up the biggest buyers of gold in the world. China factors in here to a lesser extent as well. To Pisani, it’s a bit of a play on the health of the Chinese and Indian consumer, as well as on central banks.
Watch This Discussion Celebrating GLD’s 15th Anniversary
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