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As Investors Flee to Safety, Buy These Leveraged Gold ETFs
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As Brexit fears mount, investors are looking for ways to safely put away their money. Many fear that banks will undergo a financial collapse if a Brexit takes shape. A leave from the EU invites uncertainty, and with that comes higher levels of volatility in the market, especially for the UK.
This has the potential to cause a ripple effect which will result in reduced amounts of liquidity for the global financial system. A Brexit stands to hit the bottom line of many UK and EU corporations rather quickly. Many speculate that banks will be among the first to get hurt by a Brexit, and it is possible that equity markets will panic; resulting in a huge asset sell-off which could trigger a global financial crisis.
Negative Yields
Investors are aware of this possibility, so they’ve fled to government bonds in order to keep their money safe. A high demand for government bonds have caused the debt of some countries to go into negative territory on the yields front. These bonds are often thought of as the safest way to invest because they are backed by the confidence of the government. When folks are putting their money into bonds with negative yields, they are willing to invest that money, even though they expect to get back even less than the principal amount invested. They are willing to do this because little else looks safe right now.
Hedge Against Risk
If turmoil does ensue because of a Brexit, people will continue to flee towards safe investments, perhaps at an even higher rate than we see now. If such a thing happens, then gold stands to see higher levels of demand, resulting in investors pushing the price per ounce even higher than it already is. Gold has traditionally been thought of as being a truly valuable commodity, and that logic seems to be prevailing after five dismal years for the commodity. Take advantage of the trend by utilizing the power of these leveraged gold ETFs.
VelocityShares 3x Long Gold ETN-
This ETN gives you exposure to an index comprised of gold futures contracts, in this case, UGLD offers investors three times the exposure to the S&P GSCI Gold Index ER. The 3 month average volume for this ETN comes in at 535,605. UGLD has a 1.35% expense ratio. While the yearly fee is a bit on the high end, the pay off has been nice, producing returns of 73.3% year-to-date.
This exchange traded note has over $140 million in assets, and it has produced a 53% return for investors year-to-date. DGP seeks to give investors two times the exposure to certain gold futures contracts plus returns from investing in 3 month US treasury bills. The expense ratio is cheaper than UGLD at 0.75% per year.
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As Investors Flee to Safety, Buy These Leveraged Gold ETFs
As Brexit fears mount, investors are looking for ways to safely put away their money. Many fear that banks will undergo a financial collapse if a Brexit takes shape. A leave from the EU invites uncertainty, and with that comes higher levels of volatility in the market, especially for the UK.
This has the potential to cause a ripple effect which will result in reduced amounts of liquidity for the global financial system. A Brexit stands to hit the bottom line of many UK and EU corporations rather quickly. Many speculate that banks will be among the first to get hurt by a Brexit, and it is possible that equity markets will panic; resulting in a huge asset sell-off which could trigger a global financial crisis.
Negative Yields
Investors are aware of this possibility, so they’ve fled to government bonds in order to keep their money safe. A high demand for government bonds have caused the debt of some countries to go into negative territory on the yields front. These bonds are often thought of as the safest way to invest because they are backed by the confidence of the government. When folks are putting their money into bonds with negative yields, they are willing to invest that money, even though they expect to get back even less than the principal amount invested. They are willing to do this because little else looks safe right now.
Hedge Against Risk
If turmoil does ensue because of a Brexit, people will continue to flee towards safe investments, perhaps at an even higher rate than we see now. If such a thing happens, then gold stands to see higher levels of demand, resulting in investors pushing the price per ounce even higher than it already is. Gold has traditionally been thought of as being a truly valuable commodity, and that logic seems to be prevailing after five dismal years for the commodity. Take advantage of the trend by utilizing the power of these leveraged gold ETFs.
VelocityShares 3x Long Gold ETN-
This ETN gives you exposure to an index comprised of gold futures contracts, in this case, UGLD offers investors three times the exposure to the S&P GSCI Gold Index ER. The 3 month average volume for this ETN comes in at 535,605. UGLD has a 1.35% expense ratio. While the yearly fee is a bit on the high end, the pay off has been nice, producing returns of 73.3% year-to-date.
DB Gold Double Long ETN-(DGP - Free Report)
This exchange traded note has over $140 million in assets, and it has produced a 53% return for investors year-to-date. DGP seeks to give investors two times the exposure to certain gold futures contracts plus returns from investing in 3 month US treasury bills. The expense ratio is cheaper than UGLD at 0.75% per year.
The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>