Topic: How To Invest

Pat: I would appreciate your thoughts on the BMG Gold BullionFund. Thanks.

Article Excerpt

BMG Gold BullionFund is an open-ended mutual fund that holds at least 95% of its assets in gold bullion. In general, we recommend staying away from buying gold bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. Unlike stocks, commodity investments like gold bullion do not generate income. Instead, they come with a continuing cash drain for management, insurance and so on. In addition, the MER on BMG Gold BullionFund is a very high 3.07%. For that reason alone, we advise against investing in this fund. In contrast, the SPDR Gold Trust ETF, $117.74, symbol GLD on New York (Units outstanding: 265.8 million; Market cap: $31.3 billion; www.spdrgoldshares.com), is a relatively low cost and liquid way to hold gold bullion. SPDR Gold Trust is an investment trust that aims to reflect the performance of the price of gold bullion, less the trust’s costs. Its sole assets are gold bullion and, from time to time, cash. SPDR Gold…

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