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Apollo strikes gold with ETF

Apollo Multi-Asset Management believes that exchange traded funds provide the best way for multi-managers to gain exposure to gold.

The company holds the ETF Securities gold bullion securities exchange traded fund for its inverse relationship with equities and as an alternative to the US dollar. This ETF tracks the price of gold and is backed by physical gold, which is held by the custodian, HSBC Bank.

Gold funds differ in that they invest mainly in the equities of mining companies which may have a broader focus than gold. Their performance is more likely to reflect the equity market than the price of gold bullion.

Share prices of mining companies tend to be more volatile than the price of gold bullion because they are affected by a range of factors such as market expectations for the price of gold and mining costs.

Apollo fund manager Tom McGrath says: “If we invested in gold in funds, the returns are still correlated with equities. Even if the price of gold goes up, a gold fund will still perform in line with equities rather than the price of physical gold.”


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