Monday, 19 December 2011

ETF frenzy for private investors: gold included

Ten of the top 20 shares traded by clients of FTSE 100 broker  Hargreaves Lansdown were ETFs (exchange traded funds). The majority of these were ETF Securities commodities products and the most sold and the most bought of these was ETF Securities Physical Gold sterling (PHGP) which is exactly the same as PHAU.... except it is more expensive to trade. (Both are  automatically converted into sterling when sold.)

PHGP made up 2% of deals bought while PHAU was 1.2% on 19 December.

On the  selling front PHGP made up 3.5% of the value of all shares sold through Hargreaves Lansdown while PHAU made up 2.3%.

I don't know if I'm missing something but it looks like clients of Hargreaves Lansdown are mostly private investors and they mostly buy and sell the sterling product. But the dollar version has more assets under management, presumably institutional investors, who pay less to own it. Some people are trading chunks of PHGP shares worth more than  £1 million. If they bought and then immediately sold they would lose £2,000 if they did the same with PHAU they would lose £800.

For PHAU the spread was 0.08%:

While the spread for PHGP was more than double that at nearly 0.2%:

Today one the largest trades in  PHGP was over £500,000 but on Thursday 15 December some were around the £1 million mark.

19 December 2011

 15 December  2011

Meanwhile my holdings are bereft  of ETFs  after I sold them all on Friday. But today BlackRock Gold and General fund's unit price showed gains today when it was valued at midday. But that was before Canadian markets opened which saw Eldorado - 3.3% of the fund according to its latest factsheet (October 31- when is a new one due?) -  drop by nearly 13% after acquiring European Goldfields.