ETF WEEKLY REPORT
September 25 2021
I – Global information and fundamental analysis about silver
Chart 1 : Gold Price Live
Source : BullionVault
An exchange traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index. In this report, we’ll focus on the gold metal.
Gold remains one of the best performing asset classes year-to-date despite recent fluctuations and even if it has been affected by the economic and financial market conditions like most asset classes.
Chart 2 : Gold performance 2021
Source : BullionVault
Chart 3 : CBOE Gold Volatily Index
Source : CBOE
The GLD Index (GLD) is a price index that does not include reinvested dividends.
Gold is often a source of liquidity in times of crisis and considered as a safe haven, but as represented in the graph above, recent volatility in the gold price (high volatility during March) is likely to be driven by massive liquidations across all assets and leveraged positions. Actually, the sharp sell-off of risky assets like stocks caused margin calls requiring liquidity sourcing, investors need to meet capital requirements. Given that Gold is a high-quality liquid asset it has been used to raise cash to cover losses.
The Cboe Gold ETF Volatility Index ‘Gold VIX’ (Ticker: GVZ) measures the market’s expectation of 30- day volatility of gold prices by applying the VIX methodology to options on SPDR Gold Shares
Chart 4 : Inflows of gold
Source : GoldHub
« Global gold ETF holdings fell by 177.9t (US$9.5bn). Western markets drove outflows as US rates rose sharply and the US dollar strengthened.
The US dollar gold price fell by 10% during Q1. The recent downward trend was fuelled in part by ETF outflows and a reduction in net long positioning in the futures market, but strong consumer demand helped to provide support.
Demand for gold bars and coins saw a third successive quarter of growth. Investment in these products reached 339.5t – the highest quarter since Q4 2016.
Jewellery demand staged a strong recovery from lockdown-stricken Q1 2020. But it remained relatively subdued on a historic basis – 6% below the five-year quarterly average of 505.9t.
Global central bank gold reserves grew 95.5t in Q1. Hungary’s large purchase (+63t) bolstered Q1 buying, more than matching Turkey’s substantial sale (31.5t).
Total supply of gold fell 4% y-o-y in Q1. Mine production growth ws outweighed by a fall in recycling, largely in response to weaker gold prices. »
Now let’s turn to the ETF Analysis.
2 – iShares Gold Trust
The aim here is to gain exposure to assets directly or indirectly linked to gold. We will look at past performance, top 10 holdings and fund characteristics.
Chart 5 : Funds fact
Source : iShares
Chart 6 : Funds performance
Source : iShares
We have just proposed a fund that will replicate the price of gold. It is often advised by managers to hold around 20% of their portfolio in gold. The investment method for this type of investment is the dollar cost average, which consists of a regular purchase method, allowing a price to be smoothed over time.
