October 27, 2012

Gold is regarded as a currency that cannot be manoeuvred by interest rate policies of any one government. It has traditionally been an asset class used as a hedge against inflation. And therefore is deemed to be a safe haven during times of uncertainty. This simple logic is leading many investors to invest in gold mutual fund and ETFs.

With inflation pretty much on the cards - following the recently announced QE3 plan - and the uncertain global economic environment - with Asia slowing and developed regions being submerged in debt and facing fiscal issues - investors are turning to gold again.

Investors are flocking to gold mutual funds and exchange-traded funds amid concern that the Federal Reserve’s continued easing program will spark inflation. The U.S. fiscal cliff, Europe’s debt crisis and China’s economic slowdown also have turned investors bullish toward the precious metal.

Spot gold has risen 9 percent during the past three months, closing Friday at $1,670 an ounce. Billionaire Canadian investor Frank Giustra is particularly enthusiastic about the precious metal. "I don't know when and I don't know how high. But gold is going a lot higher.

NCM: New Gold ETF

TheNigerian Stock Exchange on 19^th December 2011 listed 400,000 units of New Gold Exchange Traded Funds (ETF) at a Net Asset Value of N2, 526 per unit to enable investors to invest directly in gold. This was done in an effort to create an alternative investment portfolio.

Gold has risen by 9% in the past three months at the international market. The New Gold ETF in NSE has only risen by 3.96% in the past ten months. This simply suggests that investors are not still taking the full advantage of the fund as the opportunities still remain untapped.