Getting exposure to gold: what’s the best way?

Gold is having a moment. Investors are flocking to the commodity as a hedge against the coronavirus pandemic, together with geopolitical tensions. Gold is also at a record-high, hitting $2000 an ounce for the first time. So how do you get involved, and with gold prices rising more than 30% this year, what are the risks and potential returns? Independent financial expert Dawn Ridler and Lisa Segall, director and certified financial planner at GinsGlobal Index Funds, unpacked gold and its current market exposure, at the BizNews' Friday Finance webinar, hosted by BizNews editor Jackie Cameron. – Nadim Nyker.The 'up' potential of gold has passed.Jackie Cameron: Dawn, could you sketch out the risks and potential returns when you're looking at gold?.Dawn Ridley: Coming into the lockdown, you know, [gold] is a safe haven. That's why everybody's rushing towards gold at the moment. So, whenever everybody's question is, 'I need to buy gold', the stable doors open, the horse has bolted. You know, there's not that huge up potential and that's gone. Smarter people than you actually took advantage. That's a shame. .___STEADY_PAYWALL___.DR: [And] when it comes to gold mines there are so many other issues, including strikes and labour and labour costs and shut down a mine because of Covid, and all sorts of other issues involved in gold mining. In fact, in any of the commodities. It's foolhardy to try and pick a gold mine share or whatever else it is to give you that leveraged exposure to gold, you're much more likely to get your fingers burnt in my opinion. .Read also: Is it too late to join the gold rush?.Getting gold exposure through passive investing.JC: Lisa, do you offer exposure to gold [at GinsGlobal] through any of your products?.Lisa Segall: The MSCI World actually will have. So the MSCI World, which is your global equity fund, which is 1,600 shares, and some of the holdings have underlying gold companies in it. So you would get exposure. That to me is the basic foundation for a client who wants exposure offshore. It's a steady Eddy. You know, it's not going to shoot the lights out..Read also: Joburg mine dumps are behind world's best-performing gold stock.LS: But you need to build your foundation offshore. It's your bricks and mortar and the bricks and mortar is 1,600 shares. Your MSCI World, it's across regions and sectors. You know, as Dawn said, you don't know if gold's going to outperform. I think the MSCI World gives you [enough]. It's 23 developed countries and across most sectors as well. And it's got a 64% weighting in the U.S. So for someone who doesn't have any offshore exposure, I think it's a good building block..You need to build your foundation offshore. It's your bricks and mortar and the bricks and mortar is 1,600 shares [that's] the MSCI World..Buying physical gold is not the way to go.DR: You know, when we're talking about gold. And if you want exposure to gold and in my opinion, gold mining companies is not the way to go about it. But in the same breath, I would also say that physical gold or the Kruger rand or something like that, is also not the way to go about it. There's some very good offshore and local gold ETF trackers where you can get exposure to the movement in the gold price without the physical risk of of actually owning the stuff..For the full conversation, check out the webinar below:.Biznews editor Jackie Cameron's Finance Friday webinar is one of our most popular of the week. Her specialist moneycraft panelists answer questions on investing, saving and planning for the future. Join here:https://attendee.gotowebinar.com/register/4798730946457764880

Getting exposure to gold: what’s the best way?

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