Q: Hi 5i, If you had to hold only one gold position, which would you choose...AEM or PHYS? btw...what is the MER of PHYS and would this be a factor in your decision?
Thanks
Thanks
5i Research Answer:
MER on PHYS is 0.41%. This is a bit high for the simplicity of the fund, but it is large and liquid and closely tracks the gold price due to its structure (large holders can redeem for bullion if they want). We can live with the MER.
The question vs AEM really depends on an investor's goals. We see bullion as 'insurance' against various calamaties that might occur, and gold stocks as companies that will benefit from a rising gold price. BUT...in a true crisis, gold stocks are still stocks, and can decline (as they did in 2008). But, looking at the current outlook, we would choose AEM for potentially greater upside potential.