by Chris Horlacher, MapleLeafMetals.ca:
With the recent introduction of the Royal Canadian Mint’s ETR program, I thought now might be a good time to really explain why I’m in the business that I’m in and why I think that taking physical possession of your precious metals is the safest, most cost effective way of investing in precious metals.
This November 28th a new offering of a gold investment vehicle by the Royal Canadian Mint will close. This program, known as an Exchange Traded Receipt (“ETR”), is another in a long line of paper-gold investments that are now trading on securities exchanges worldwide. It, like all of the other programs, comes with a slew of fees, risks and other items that investors need to be aware of because they can have a serious impact on their financial security especially during these volatile times.
Fees
The number one question investors should ask when participating in ETR’s, or any other kind of proxy gold investment, is “What are the costs?” The Mint’s program has a number of them that make ETR’s unattractive. The first is the 3% agent’s fee. What this means is that for every $100 invested in to the ETR’s, $97 is used to purchase gold and $3 is handed over to the banks and brokerages as their commission for making a successful sale. The second is the storage fee, which equates to 35 basis points, or 0.35%, per annum.
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