Question: At the Switzer investor day, you spoke about the role of gold in a portfolio. I am just about to invest via an exchange-traded fund (ETF). BetaShares’ gold ETF is hedged and ANZ’s gold ETF is unhedged. Which way should I go? The fees are .65% & .40% respectively. I will be doing my broking online.
Answer: (Paul Rickard): Notwithstanding the higher management fee, I would probably be inclined to buy the hedged gold ETF (from Betashares – ASX Code (QAU)). I think fair value for the Australian dollar is around 70 US cents – so don’t see that much value in being unhedged at these levels. I don’t rule out the Australian dollar having a good go at the 70 cent level – but in the long term, I don’t think we are too far off fair value.
Question: I have just read Charlie Aitken’s article on Transurban (TCL), with which I strongly concur. I have also recently read articles on the impending great recession/depression, which is about to ravage the world economies, and various ways to prepare for this likely/unlikely event. Various measures include buying large quantities of gold (the real stuff, not paper), and investing in ‘hard’ assets.
My question is whether he considers TCL a hard asset, owning as it does many quality roads with a strong moat, and whether this company would be a suitable investment to guard my capital against this depression if and when it arrives.
Answer (Paul Rickard) I don’t agree with your analysis that a great recession or depression is impending.
If the great recession does happen, I think Transurban shares would qualify in the medium category rather than hard. Transurban will suffer some decline in revenue as discretionary motor vehicle trips are reduced and the economy slows.
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