Gold as a Diversification Tool

I saw a presentation from the World Gold Council today and was impressed with the investment case for gold as portfolio diversification tool.

While gold has shown strong returns over recent years, its most valuable contribution to a portfolio lies in the fact that it is not correlated with most other assets, as shown in the chart.

Several ETFs provide a vehicle for investing in gold.

The largest gold ETF is SPDR Gold Shares (GLD). The $14 billion fund offers a claim on actual gold bullion that sits in a vault in London.

The COMEX Gold Trust (IAU) is another fund that owns gold bullion. The DB Gold Fund (DGL) tracks the performance of gold through futures contracts.

See the ETF Directory for a complete listing of commodities etfs.

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