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Gold is safer than mining stocks: State Street’s Milling-Stanley

Investors looking to weather a volatile market may want to opt for physical gold over gold stocks.

So says George Milling-Stanley, one of the world’s leading gold experts and chief gold strategist at State Street Global Advisors.

“One of the reasons I own gold bullion is because I think it gives me some protection against potential stock market weakness,” Milling-Stanley told CNBC’s “ETF Edge” this week. . “When the stock market falls, gold mining stocks remember that these are stocks and tend to fall with the general level of the stock market. So they don’t offer me that extra level of protection. »

The Milling-Stanley Company manages two exchange-traded funds that track the spot price of gold: the SPDR Gold Stock ETF (GLD) and SPDR Gold MiniShares Trust (GLDM).

They differ in their gross expense ratios — 0.40% for GLD and 0.10% for GLDM — and it’s this key distinction that also differentiates the type of investor they attract, according to Milling-Stanley.

“If you’re someone who wants to trade… or if you want to be a tactical player – that means you have to be able to move very, very quickly – then the liquidity of GLD after 20 years means that it has very, very low trading costs compared to any other gold ETF,” he said. “If you have a million dollars and you want to invest a million dollars in gold and leave it there, then GLDM, with its lower expense ratio, makes more sense for you.”

As of Thursday’s close, GLD and GLDM were both up 15% year to date.

Bullion, bitcoins and baby boomers

The idea that gold is a “fuddy-duddy” investment that no longer rings true, according to Milling-Stanley. State Street’s 2023 Gold ETF Impact Study found that millennials have a larger share of their portfolios allocated to gold than older generations.

The metal’s popularity among younger investors comes as bitcoin continues to attract millennial and generation Z assets. A Policygenius survey released this week found that millennials were more likely to own bitcoin than any other generation, and that Generation Z was more likely to own bitcoin than stocks, bonds or real estate.

But Milling-Stanley rejected the idea that gold and bitcoin are competing for assets at all levels.

“Bitcoin could well provide competition for those who want to take a tactical position on gold and just wait for the price to rise and sell. I think Bitcoin could well provide competition in this area,” he said. declared. “But I don’t think bitcoin is really competitive in terms of long-term strategic allocation, and that’s where I think gold really comes into its own.”

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