Let me start by saying that Guernsey Mint Refined has spent a great deal of time, money and effort to allow clients the choice of investing in three, quite distinct, bullion investment classes: physical, unallocated and exchange-traded.
Our business is not more 'for' or 'against' any of these in any way whatsoever.
We see the merits and the restrictions offered by each and, as tends to be the case, the risk / reward equation seems fair and justifiable:
Physical bullion costs more, but should give investors absolute peace of mind with regards to their asset holding;
Unallocated trading (until called off metal account to physical) involves specific counterparty risk over a non-definite asset but is, as a result, the cheapest route to physical bullion exposure;
Physically-backed exchange-traded commodities sit quite nicely between the two - offering, for an annual management fee, a robust structure listed on a credible exchange with transparent reporting.
Let me next re-iterate that I am not an avid believer in the 'end of the financial world' argument, just yet, even though I have just watched, on the recommendation of a great client, a dcoumentary that made more sense to me than I wanted it to!
Disclaimers done, I write having had some light correspondence with a local stockbroker and having, separately, met with someone from the exchange-traded fund industry this week.
Subsequent reading up* on the world's largest exchange-traded bullion investment, the SPDR ® Gold Shares ("GLD") - currently not available through GMR owing to GLD's listing on the NYSE rather than the LSE and the associated tax reporting issues involved - leads me to post the below:
It seems extremely difficult to take physical delivery of gold held via GLD
GLD shares can only be redeemed in lots of 100,000 (the share price is $1,754 - so this equates to just over $17.5million for your info);
SPDR will only permit you to take physical gold with its permission - a permission normally reserved for its authorised brokers and market makers (such as Goldmans and JPMorgan);
SPDR has the ultimate option to give you the cash alternative in any event.
* Information taken from GLD's publicly available documents, including annual SEC filing reports
Sunday October 14, 2012 by