The Cost Case For GLD When It Comes To Hedge Funds And Institutional Investors
The cost of trading an ETF goes beyond expense ratios, and in the case of hedge funds and institutions, that's especially true.
In a blog last week, I explored the positions two high-profile hedge fund managers, John Paulson and George Soros, are taking in the SPDR Gold Shares (NYSEArca: GLD), the huge gold ETF.
In that piece, I compared the round-trip cost over the course of a year of buying, holding and selling GLD with the cost of the iShares Gold Trust (NYSEArca: IAU). I stand by this analysis as it relates to retail investors.
After all, the average spreads and expense ratio figures I quoted are indisputable. Those are the round-trip costs a retail investor is likely to have to pay in buying and selling the funds.
Different Investors, Different Costs
The problem is I used two institutional investors to make my case. As I attempted to touch on, liquidity means different things to different investors. For example, when I stated that the two funds are similarly liquid, that only holds true for retail investors. READ FULL ARTICLE HERE