Friday, 19 September 2014
Last updated 16 hours ago
Aug 16 2010 | 7:26am ET
There’s more glitter than gold in gold exchange-traded funds, one prominent gold hedge fund has claimed.
Hinde Capital took aim at gold ETFs and State Street’s SPDR Gold Trust, in particular, in a recent paper. The London-based firm wrote that central banks’ practice of lending gold to commercial banks leads to a lot of double-counting in the global markets, and that ETFs are one of the biggest culprits on that score.
“We see it as highly likely that encumbered gold or leased gold could be in ETF products,” CEO Ben Davies wrote. “If we were a major ETF holder, we would demand delivery of our physical bullion before all other investors demanded theirs from either ETFs or the OTC market.”
Of course, Hinde isn’t a major gold ETF holder, because, as Davies wrote, gold and other precious metal ETFs “should not be owned by serious professional investors,” the Financial Times reports.
Davies also called State Street’s management of the SPDR Gold Trust—by far the largest gold ETF—into question, noting that the fund’s custodian, HSBC, is a substantial shorter of gold. State Street brushed off the criticism.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.