News Column

First Gold Bullion Mutual Fund QGLDX Marks Anniversary; Fund Provides Convenient, Effective Portfolio Exposure to Gold

August 16, 2014



By a News Reporter-Staff News Editor at Investment Weekly News -- The Gold Bullion Strategy Fund (QGLDX), the first mutual fund that allows retail investors to participate in the daily price changes of gold bullion, has marked its one-year anniversary. Launched in July 2013, QGLDX seeks to offer a way for investors to track the daily price changes in gold bullion with the convenience of a mutual fund.

Previously, those looking for ways to diversify their portfolios with a gold allocation might choose funds that invest in gold mining shares, which may not track gold bullion very well, or commodity futures funds, which might have a more costly and complicated tax structure than traditional mutual funds. And, many ETFs that offer gold exposure are subject to "collectables" taxation and Schedule K-1 tax reporting rules which can cause investors to delay filing their tax returns, as well as requiring them to file tax returns in multiple states and deal with unrelated business taxable income. QGLDX avoids both of these problems.

"Furthermore, gold is a unique diversifier during trying times," explains Jerry Wagner, Portfolio Manager for the Fund and President of Flexible Plan Investments, Ltd., the Fund's sub-advisor. "As our recent white paper shows, over the last 40 years gold has proven to be the best or second best asset class to hold during seven different investing scenarios that concern investors. And holding gold in even a balanced portfolio has increased risk-adjusted returns over that period."

Wagner notes that recent geopolitical events have sparked more queries from advisors and investors about gold, sending the young fund to over $50 million in assets (6/30/2014). He remarked that while investors don't have to try and time gold investments given their proven role as a mitigator of portfolio volatility, at present, from both a technical and fundamental perspective, gold prices seem quite low.

Wagner notes that QGLDX is a convenient and effective way to get exposure to gold with the benefits of daily liquidity and 1099 reporting, and with its included holdings in short-term bonds actually has the possibility of offsetting the normal expense associated with other commodity-based mutual funds.

The fund invests in gold bullion ETFs and derivatives to seek to reflect the daily changes in the price of gold bullion. In addition, it allocates assets to short maturity bond investments in order to produce interest income to accomplish its tax strategy and reduce expenses. During its first year of operation, this tracking fund yielded a return within 29 basis points of the price change of the largest gold ETF after all expenses.

The Gold Bullion Strategy Fund is currently available in a no-load format as well as the recently launched A and C shares. Additionally, a variable investment trust of the portfolio is available through Jefferson National.

To obtain a copy of the 40-year gold study entitled "The role of gold in investment portfolios" and learn more about QGLDX, please visit: www.goldbullionstrategyfund.com

Keywords for this news article include: Advisors Preferred Llc, Investment and Finance.

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Source: Investment Weekly News


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