Q: Is AMAX ETF (Hamilton gold producer ETF) an effective way to invest in gold and is this a good time to invest in gold given forecast volatility of the Canadian index 2024?
Thank you 5i research
Thank you 5i research
5i Research Answer:
We have nothing against AMAX, but it is a specific covered call fund with income as its main goal. With the gold sector, because it can go on big 'runs' we tend to prefer straight equity ETFs. With covered call funds, upside potential is not as great because of the covered call strategy. If an investor is looking to hedge a portfolio with gold, we think a fund such as XGD would work better than an income-focused fund. AMAX has a short history, but a three month return of 5.92%. XGD, for example, is 12.73% in the same period.