By ETF Heat Map Team

The world has entered an unprecedented era in its history. To counteract deflationary pressures, central banks in Europe and Japan have implemented Negative Interest Rate Policies (NIRP). Given NIRP, investors (including asset managers) have begun reevaluating their portfolio allocation to gold.

As NIRP increases, gold as a percentage of one’s portfolio would increase given:

  • Lower opportunity cost of holding gold.
  • Limited pool of assets that some investors would invest in (negative yielding bonds).
  • Heightened market volatility / uncertainty.
  • Eroding confidence in certain fiat currencies.

 

Gold Stats

In 2015, investment demand was up 9% year over year (895 tons versus 822 tons – see chart). While bar and coin demand increased in 2015,  ETF outflows were lower in 2015 relative to prior years.

Given the wealth preservation / risk diversification benefits of this precious metal, investor sentiment has been on the rise given the following factors:

  1. Geo-political unrest – Terrorist attacks occurring on a frequent basis in either Europe or North America.
  2. Financial market volatility – Global monetary policy measures along with the Chinese economic shocks have contributed to a heightened volatility in the markets.
  3. US economic recovery timeline – The elections coupled with the lengthy US economic recovery have contributed.

We have decided to preview certain Gold ETFs that are available in the ETFsMap Database and Screener:

  • GLD – SPDR Gold Shares ETF
  • IAU – iShares Gold Trust ETF
  • UGL – Ultra (2x) Gold ETF
  • GLL – UltraShort Gold ETF

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