Adding a shine to your holdings
There are a variety of ways you can give your portfolio a gilt edge.
Tue, Dec 15, 2009
The Straits Times
Bars and coins
United Overseas Bank (UOB) sells physical gold that can be bought from and sold back to the bank at its daily buy-sell market rate. Gold bars come in a range of sizes, from small wafers to cast kilobars. Coins range from one-twentieth of an ounce to one ounce.
'This is one of the best forms of gold investment as you can keep the coins and bars in safe deposit boxes, and there is a variety of sizes to choose from,' said IPP Financial Advisers investment director Albert Lam.
A cast gold bar is made when melted gold is poured into a mould to achieve the desired shape and weight.
Gold bars and coins are subject to goods and services tax (GST) so an investor will lose 7 per cent of his investment up front.
Certificates
At UOB, a gold certificate is sold in kilobars, which are kilogram bars of gold.
In a single certificate, you can buy up to 30 kilobars.
UOB sold one kilobar for $55,416 last week.
The certificates have no expiry date and can be exchanged for physical gold or cash whenever the need arises.
A flat $5 charge for each certificate and an administrative fee of $30 a kilobar per year apply.
Gold savings account
At UOB, consumers can, through a passbook, buy and sell gold at prevailing market prices and transact any time during banking hours.
Teacher Arfiah Arshad, 39, sank $5,000 into a UOB Gold savings account last December and $5,000 into UOB Gold and General unit trust in February.
Both accounts are up by 50 per cent.
She invested in gold after her adviser at Financial Alliance, Mr Sani Hamid, suggested she do so in order to diversify her portfolio.
'When I went to open a gold savings account at UOB, the relationship manager tried to persuade me to invest in an Asia infrastructure unit trust because she said few people were investing in gold then,' said Madam Arfiah, who did not heed the banker's advice.
'I'm glad I stuck to investing in gold,' she said.
Citibank also offers retail customers the chance to trade in gold via its Citibank Gold Account.
To establish this account, you just need to buy a minimum of 30 ounces of gold, said Mr Shrikant Bhat, Citibank Singapore's head of wealth management.
The price of gold hit a record of US$1,226.10 an ounce last week.
Gold jewellery
Perhaps the easiest way to buy physical gold is to walk into a goldsmith and buy 22-karat or 24-karat jewellery.
But Mr Lam cautioned: 'Design and workmanship costs are priced into the jewellery and hence if consumers are buying for investment purposes, they end up paying a premium.'
Funds and ETFs
One fund that gives exposure to gold is the Schroder Alternative Solutions Gold and Metals Fund.
The fund's gold exposure varies between 25 per cent and 75 per cent. The rest comprises industrial metals such as copper and aluminium.
Exchange traded funds (ETFs) are another alternative. They allow people to gain exposure to gold prices without taking delivery of the metal itself.
They trade like stocks on the exchange, so you can buy and sell them at market prices throughout the trading day.
Gold ETFs include SPDR gold shares, which are listed on the Singapore Exchange.
Post Date: 17 Dec 09
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