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TheStreet Open House

[video] Quick Take: SPDR Gold Trust: What You Need to Know

NEW YORK ( TheStreet) -- With so many different strategies available to investors these days, Kevin Quigg, global head of ETF sales strategy at State Street, tells TheStreet's Joe Deaux the difference between physical gold and the SPDR Gold Shares Trust ETF (GLD).

Quigg said there's nothing wrong with owning physical gold for certain investors, but the exchange-traded fund has significant advantages. GLD is backed entirely by physical gold, but allows investors to trade it like a stock, creating more liquidity and improving efficiency.

Regarding net outflows, it simply means more people have been selling the ETF than buying, he said. But Quigg added that the outflows could be attributed to portfolio rebalancing, as investors look to take advantage of different assets within the market.

"We do caution investors to not look just at the price of gold, but also the role of gold" in their portfolio, he said.

The yellow metal provides stability, diversification and non-market correlated returns, which was obvious during the recent credit crisis, Quigg added. As for the gold miners, he reminded investors without investing through the ETF, they are more exposed to the miner's risks, including management actions and mining efficiency.



-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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