1 00:00:05,240 --> 00:00:07,520 Speaker 1: Welcome to the Fear and Greed business Interview. I'm sure 2 00:00:07,520 --> 00:00:10,719 Speaker 1: an almight gold is having a record breaking run right now, 3 00:00:10,760 --> 00:00:13,480 Speaker 1: with the price of the precious metal surging well passed 4 00:00:13,600 --> 00:00:16,520 Speaker 1: three thousand US dollars an ounce. Gold's along been seen 5 00:00:16,640 --> 00:00:19,720 Speaker 1: as a safe option and the boom reflects the volatility 6 00:00:19,720 --> 00:00:21,759 Speaker 1: and global markets at the moment. One of the main 7 00:00:21,800 --> 00:00:26,279 Speaker 1: ways Australians invest in gold is through ETFs exchange traded funds, 8 00:00:26,600 --> 00:00:30,080 Speaker 1: and one of the best named ETFs comes from global 9 00:00:30,120 --> 00:00:33,320 Speaker 1: investment giant Van Neck. The ASEX code for its gold 10 00:00:33,360 --> 00:00:38,559 Speaker 1: bullion ETF is nug n ugg. Doesn't get better than that. 11 00:00:38,760 --> 00:00:41,280 Speaker 1: Remember this is general information only and you should seek 12 00:00:41,280 --> 00:00:45,600 Speaker 1: professional advice before making investment decisions. Cameron McCormack is senior 13 00:00:45,680 --> 00:00:49,360 Speaker 1: portfolio manager at Vannick. Cameron, welcome to Fear and Greed. 14 00:00:49,680 --> 00:00:50,519 Speaker 2: Thanks for having me. 15 00:00:50,960 --> 00:00:52,840 Speaker 1: We'll get onto nugge at a moment and your other 16 00:00:52,880 --> 00:00:57,120 Speaker 1: ETFs involving gold. But what's driving the price of gold 17 00:00:57,120 --> 00:00:57,640 Speaker 1: at the moment. 18 00:00:58,600 --> 00:01:01,600 Speaker 2: Yeah, it's been an interesting environment for goals and what's 19 00:01:01,800 --> 00:01:04,839 Speaker 2: I guess quite paramount is that it's not your traditional 20 00:01:04,920 --> 00:01:07,880 Speaker 2: drivers In terms of the performance of late it's been 21 00:01:07,880 --> 00:01:10,080 Speaker 2: a multitude of things. Now, if you take a set 22 00:01:10,120 --> 00:01:13,200 Speaker 2: back and look at the geopolitical environment, unfortunately it is 23 00:01:13,280 --> 00:01:16,040 Speaker 2: quite fractured and that's really been a key driver of 24 00:01:16,360 --> 00:01:20,360 Speaker 2: the performance cent of late. If you think about more recently, 25 00:01:20,520 --> 00:01:23,000 Speaker 2: we've seen weakness in the US dollar. That's been a 26 00:01:23,040 --> 00:01:26,959 Speaker 2: key cartlist for gold. And we're broadly speaking, the I 27 00:01:26,959 --> 00:01:30,800 Speaker 2: guess lack of clarity around tariffs has really spooked the market, 28 00:01:30,920 --> 00:01:33,600 Speaker 2: and because gold is seen as that safe haven asset, 29 00:01:33,880 --> 00:01:36,400 Speaker 2: that's been a key driver performance as well. Now, if 30 00:01:36,440 --> 00:01:38,600 Speaker 2: you think about the last three years, what we've seen 31 00:01:38,720 --> 00:01:42,600 Speaker 2: is we've seen consistent buying of gold from central banks 32 00:01:42,640 --> 00:01:45,520 Speaker 2: looking to really diverse by their reserves, and that's been 33 00:01:45,680 --> 00:01:48,360 Speaker 2: the ultimate key driver of why the gold class has 34 00:01:48,680 --> 00:01:52,080 Speaker 2: moved past that three thousand dollars MARC from usd dollar terms. 35 00:01:52,680 --> 00:01:55,640 Speaker 1: It does come down to supply and demand. There's actually 36 00:01:55,640 --> 00:01:58,720 Speaker 1: a very limited supply of gold in the world, and 37 00:01:58,720 --> 00:02:02,280 Speaker 1: when you're talking about central bank demanding it, that's I mean, 38 00:02:02,280 --> 00:02:05,120 Speaker 1: it's just the fundamentals of economics that's actually pushing gold up, 39 00:02:05,160 --> 00:02:05,600 Speaker 1: Is that right? 40 00:02:06,160 --> 00:02:08,560 Speaker 2: Yeah? Certainly if you look at gold miners in terms 41 00:02:08,600 --> 00:02:12,079 Speaker 2: of their supply, it has dwindled over the last twenty 42 00:02:12,120 --> 00:02:14,440 Speaker 2: to thirty years. So if you take it from a 43 00:02:14,800 --> 00:02:18,160 Speaker 2: literally lack of supply coming into the market and you're 44 00:02:18,160 --> 00:02:22,560 Speaker 2: seeing I guess quite strong demand, naturally that imbalance is 45 00:02:22,600 --> 00:02:25,040 Speaker 2: going to continue to drive the gold price further up. 46 00:02:25,680 --> 00:02:29,040 Speaker 1: So as this bull run, is it different to previous 47 00:02:29,040 --> 00:02:31,919 Speaker 1: bull runs? Certainly the price is higher than most other 48 00:02:32,400 --> 00:02:34,920 Speaker 1: any other bull run in fact, but is it kind 49 00:02:34,960 --> 00:02:36,240 Speaker 1: of typical of a bull run. 50 00:02:37,280 --> 00:02:39,160 Speaker 2: Yeah, So if you look at I guess, this full 51 00:02:39,200 --> 00:02:42,639 Speaker 2: market relative to previous bull markets. Now, if you think 52 00:02:42,639 --> 00:02:45,880 Speaker 2: about the period between twenty nineteen and twenty twenty, there 53 00:02:45,919 --> 00:02:47,800 Speaker 2: was quite a consistent ball run in terms of the 54 00:02:47,800 --> 00:02:50,639 Speaker 2: gold primes, and also coming out of COVID as well, 55 00:02:50,639 --> 00:02:52,280 Speaker 2: that was quite a consistent ball And now, the key 56 00:02:52,360 --> 00:02:55,840 Speaker 2: driver of those two bull runs it was really two things. 57 00:02:56,040 --> 00:02:59,440 Speaker 2: There was concerns about the broader economy picking up, the 58 00:02:59,440 --> 00:03:03,120 Speaker 2: global fine crisis the onset of that, but also the 59 00:03:03,160 --> 00:03:06,560 Speaker 2: stagger I guess reacceleration in growth was quite I guess 60 00:03:06,560 --> 00:03:08,960 Speaker 2: a slow burn. Now that was a key driver for 61 00:03:09,000 --> 00:03:11,080 Speaker 2: gold as well. And what we saw as well is 62 00:03:11,360 --> 00:03:15,280 Speaker 2: during those environment the US ten year real yield continue 63 00:03:15,320 --> 00:03:18,720 Speaker 2: to climb and from a technical basis, the goal price 64 00:03:18,760 --> 00:03:21,360 Speaker 2: has a very strong negative correlation with changes in the 65 00:03:21,440 --> 00:03:24,239 Speaker 2: US ten year real yield. So because of that decline, 66 00:03:24,360 --> 00:03:27,160 Speaker 2: that was a key catalyst for why the goal price increased. 67 00:03:28,080 --> 00:03:31,080 Speaker 1: Okay, what do you expect happens next? And that's probably 68 00:03:31,080 --> 00:03:33,920 Speaker 1: a totally unfair question, Cameron, because if you knew that, 69 00:03:33,960 --> 00:03:36,600 Speaker 1: you probably wouldn't be working. But I mean, what's the 70 00:03:36,760 --> 00:03:38,960 Speaker 1: prognosis for gold over the next year or two? 71 00:03:39,040 --> 00:03:41,840 Speaker 2: Do you think? Yeah? So from van X's perspective, you know, 72 00:03:41,880 --> 00:03:45,680 Speaker 2: we do see further upside from here. And the key reason, unfortunately, 73 00:03:45,760 --> 00:03:47,840 Speaker 2: is that if you think about the geo political environment, 74 00:03:47,960 --> 00:03:52,040 Speaker 2: it is very fractured. There's I guess ongoing concerns about 75 00:03:52,040 --> 00:03:56,840 Speaker 2: this tariff being quite belonged. Marcus don't like this uncertainty, 76 00:03:57,000 --> 00:04:00,240 Speaker 2: and that's really a key catalyst for why gold is 77 00:04:00,280 --> 00:04:02,480 Speaker 2: in favor at the moment, and it is really why 78 00:04:02,520 --> 00:04:05,120 Speaker 2: we think it's the bean favor going forward. Now. Now, 79 00:04:05,200 --> 00:04:07,720 Speaker 2: ourther area that we really like as well is gold miners. 80 00:04:07,800 --> 00:04:10,800 Speaker 2: Gold miners, in terms of their pricing relative to their 81 00:04:10,840 --> 00:04:13,640 Speaker 2: fair values training at a twenty five percent discount. So 82 00:04:13,680 --> 00:04:16,560 Speaker 2: if you're looking for other ways to really play gold 83 00:04:16,800 --> 00:04:19,000 Speaker 2: more oddly speaking, you know, we think gold miners are 84 00:04:19,080 --> 00:04:20,919 Speaker 2: very more placed going forward as well. 85 00:04:21,440 --> 00:04:23,599 Speaker 1: Okay, well we might come into some of those options 86 00:04:23,640 --> 00:04:26,640 Speaker 1: in a moment. But just quickly, you mentioned central banks 87 00:04:27,000 --> 00:04:29,680 Speaker 1: buying up gold. Why are they doing it? I know 88 00:04:29,720 --> 00:04:31,680 Speaker 1: the Chinese Central Bank has been a lot of news 89 00:04:31,720 --> 00:04:35,200 Speaker 1: about that one buying up gold. Is it the safe 90 00:04:35,240 --> 00:04:37,279 Speaker 1: haven reason or is there more to it? 91 00:04:38,080 --> 00:04:40,360 Speaker 2: Yes, if you look at the central banks, the key 92 00:04:40,400 --> 00:04:43,320 Speaker 2: ones buying are actually emerging markets, and the key driver 93 00:04:43,400 --> 00:04:45,680 Speaker 2: of that is that they're looking to diversify away from 94 00:04:45,720 --> 00:04:48,039 Speaker 2: the reliance on the US dollar. So really it's a 95 00:04:48,080 --> 00:04:51,520 Speaker 2: plane to decouple from the US dollar, and really goal 96 00:04:51,680 --> 00:04:54,040 Speaker 2: is seen as a way to I guess you really 97 00:04:54,040 --> 00:04:54,960 Speaker 2: play that direction. 98 00:04:56,040 --> 00:04:57,960 Speaker 1: Say with me, Cameron. We'll be back in a moment. 99 00:05:04,320 --> 00:05:08,640 Speaker 1: I'm speaking to Cameron McCormack from then ECK. So you 100 00:05:08,680 --> 00:05:11,560 Speaker 1: were talking before the break about the central banks diversifying 101 00:05:11,640 --> 00:05:15,160 Speaker 1: away from the usd Let's bring it back to sophisticated 102 00:05:15,240 --> 00:05:19,479 Speaker 1: investors and even retail investors. Where does gold fit into 103 00:05:19,520 --> 00:05:20,800 Speaker 1: their portfolios? 104 00:05:21,440 --> 00:05:24,159 Speaker 2: So if you look at golds on an isolated basis, 105 00:05:24,160 --> 00:05:27,760 Speaker 2: it is volatile relative toset other asset classes. But the 106 00:05:27,839 --> 00:05:30,000 Speaker 2: key benefit of gold is that it has a very 107 00:05:30,040 --> 00:05:32,920 Speaker 2: low correlation with other asset classes. So if you think 108 00:05:32,920 --> 00:05:37,240 Speaker 2: about in your traditional I Guess bonds and equity portfolio, 109 00:05:37,839 --> 00:05:40,719 Speaker 2: having a sleeve of gold as part of that border 110 00:05:40,720 --> 00:05:45,640 Speaker 2: portfolio has shown over the last fifteen years to increase 111 00:05:45,800 --> 00:05:49,240 Speaker 2: your return while targeting the same I guess risk profile. 112 00:05:49,279 --> 00:05:51,160 Speaker 2: So from that perspective, you know, it really is seen 113 00:05:51,200 --> 00:05:55,120 Speaker 2: as a really good way to diverse by your portfolio. 114 00:05:56,040 --> 00:05:58,400 Speaker 1: And I appreciate this is the Dorothy dixter for vank. 115 00:05:58,680 --> 00:06:02,480 Speaker 1: But ETFs. Why ETFs when you're buying gold. 116 00:06:02,760 --> 00:06:06,000 Speaker 2: Yeah, there's a range of ETFs on the market giving 117 00:06:07,400 --> 00:06:11,000 Speaker 2: exposure to the spot class of gold. From our perspective, 118 00:06:11,200 --> 00:06:14,159 Speaker 2: we offer nug and the key I guess differential for 119 00:06:14,400 --> 00:06:17,599 Speaker 2: our offering is that it only gives you exposure to 120 00:06:17,920 --> 00:06:20,800 Speaker 2: gold held at the Perth Mint. If you think about 121 00:06:20,800 --> 00:06:23,279 Speaker 2: some of the other players in the market, the majority 122 00:06:23,279 --> 00:06:26,400 Speaker 2: of them do give it, do give you exposure gold, 123 00:06:26,640 --> 00:06:28,919 Speaker 2: but it's held at the JP Morgan vault in London. 124 00:06:29,160 --> 00:06:32,520 Speaker 2: And with those I guess gold bars, they come from 125 00:06:32,520 --> 00:06:34,840 Speaker 2: all around the world, so that include the likes of 126 00:06:35,440 --> 00:06:38,360 Speaker 2: even I Guess Russia. So from that perspective, if you're 127 00:06:38,400 --> 00:06:41,120 Speaker 2: looking for just I guess exposure to austray and goals. 128 00:06:41,360 --> 00:06:42,880 Speaker 2: That's a key differential there. 129 00:06:44,080 --> 00:06:47,920 Speaker 1: And tell me, does van Neck as the issuer of 130 00:06:47,960 --> 00:06:51,000 Speaker 1: the ETF, so I buy a unit in the ETF, 131 00:06:51,320 --> 00:06:55,400 Speaker 1: does Vannick actually as the issuer own the gold? I 132 00:06:55,520 --> 00:06:57,320 Speaker 1: presume it's not in your vaults. I presume it sits 133 00:06:57,320 --> 00:07:00,720 Speaker 1: in the perth Mint. But you actually own the physical gold. 134 00:07:00,800 --> 00:07:01,280 Speaker 1: Is that right? 135 00:07:01,839 --> 00:07:04,440 Speaker 2: Yeah? So if we went to perfmitt and did our 136 00:07:04,520 --> 00:07:08,320 Speaker 2: due diligence, there would be an allocation I guess stored 137 00:07:08,320 --> 00:07:13,000 Speaker 2: away for our nug ETF that gives you direct allocation 138 00:07:13,200 --> 00:07:14,520 Speaker 2: to the underlying goal. 139 00:07:15,160 --> 00:07:20,080 Speaker 1: Okay, And can individuals so I'm not recommending this at all, 140 00:07:20,440 --> 00:07:23,520 Speaker 1: but can individuals buy They can buy goal certificates I 141 00:07:23,520 --> 00:07:25,360 Speaker 1: think for the perth Mint, so they can actually own 142 00:07:25,600 --> 00:07:28,640 Speaker 1: the goal themselves, I presume, rather than doing an ETF. 143 00:07:29,200 --> 00:07:32,440 Speaker 2: Yeah, so that investors do have the option to I guess, 144 00:07:32,760 --> 00:07:36,480 Speaker 2: get exposed to the gold themselves through, for example, per minute. 145 00:07:36,760 --> 00:07:39,240 Speaker 2: I guess the key difference when you think about ETFs 146 00:07:39,320 --> 00:07:42,160 Speaker 2: is because you're investing as part of a rule er 147 00:07:42,480 --> 00:07:46,000 Speaker 2: I guess offering, you're getting an institutional rate and that's 148 00:07:46,000 --> 00:07:48,480 Speaker 2: typically in terms of the management fee less than what 149 00:07:48,560 --> 00:07:51,720 Speaker 2: you get as I guess retail investor trying to access 150 00:07:51,760 --> 00:07:54,920 Speaker 2: gold yourself. And that's really the key advantage of I 151 00:07:54,960 --> 00:07:58,760 Speaker 2: guess an ETF offering opposed to taking a direct ownership. 152 00:07:59,600 --> 00:08:01,960 Speaker 1: So not all gold is the same. You can have 153 00:08:02,200 --> 00:08:06,520 Speaker 1: nug which is a direct gold holdings, but Veneck has 154 00:08:06,560 --> 00:08:09,640 Speaker 1: other ETF so gold mine as you mentioned before, for example. 155 00:08:09,920 --> 00:08:12,760 Speaker 1: So just kind of explain why an investor might think 156 00:08:12,760 --> 00:08:15,760 Speaker 1: about gold miners rather than gold. 157 00:08:15,960 --> 00:08:19,040 Speaker 2: Yes, there's really I guess two key reasons why gold miners. 158 00:08:19,080 --> 00:08:21,360 Speaker 2: The first one being that it gives you a leverage 159 00:08:21,400 --> 00:08:24,840 Speaker 2: exposure to gold. So typically when the gold price increases, 160 00:08:25,040 --> 00:08:28,560 Speaker 2: goal miners increase by I guess higher multiple and also 161 00:08:28,640 --> 00:08:31,480 Speaker 2: on the downside as well. The second reason why you 162 00:08:31,600 --> 00:08:34,079 Speaker 2: may want to invest in gold miners is that if 163 00:08:34,120 --> 00:08:36,880 Speaker 2: you look at where prices are currently relative to their 164 00:08:36,920 --> 00:08:40,800 Speaker 2: fair value, even despite the increase in the gold price, 165 00:08:41,000 --> 00:08:42,920 Speaker 2: gold miners are still trading in a twenty five percent 166 00:08:42,960 --> 00:08:45,480 Speaker 2: discount on that basis. So from a you know, if 167 00:08:45,480 --> 00:08:48,320 Speaker 2: you think about were broadly speaking in the investment complex, 168 00:08:48,400 --> 00:08:50,880 Speaker 2: you know a lot of asset classes are very expensive 169 00:08:51,160 --> 00:08:53,440 Speaker 2: and gold miners is one of those few asset classes 170 00:08:53,480 --> 00:08:55,880 Speaker 2: that we think are really undervalued at the moment. 171 00:08:56,760 --> 00:09:00,000 Speaker 1: Why is that? So we're talking Northern Star and remeally 172 00:09:00,200 --> 00:09:03,560 Speaker 1: since these sorts of stocks, is it? I mean, the 173 00:09:03,600 --> 00:09:05,560 Speaker 1: price of gold has run, but they haven't run as hard. 174 00:09:05,559 --> 00:09:07,080 Speaker 1: I think that's what you're saying. Why is that? 175 00:09:07,920 --> 00:09:10,240 Speaker 2: Yeah, there's I guess a range of reasons. I guess 176 00:09:10,280 --> 00:09:13,200 Speaker 2: the key one being if you think about the evolution, 177 00:09:13,320 --> 00:09:16,080 Speaker 2: particularly coming out of the global financial crisis, what we've 178 00:09:16,080 --> 00:09:19,600 Speaker 2: seen is quite a prolonged growth rotation and as a 179 00:09:19,640 --> 00:09:23,199 Speaker 2: result of that, unfortunately, I think gold miners have sort 180 00:09:23,200 --> 00:09:25,240 Speaker 2: of become a bit out of favor. Given that sort 181 00:09:25,280 --> 00:09:27,839 Speaker 2: of I guess the tech players and Magnificent seven have 182 00:09:27,880 --> 00:09:30,880 Speaker 2: been very very popular. So that's really the first component. 183 00:09:30,920 --> 00:09:34,920 Speaker 2: And I think we're borely speaking value companies, and that 184 00:09:35,320 --> 00:09:37,800 Speaker 2: in itself is leads itself to gold miners have just 185 00:09:37,840 --> 00:09:40,520 Speaker 2: been out of favor because that environment. But having said that, 186 00:09:40,559 --> 00:09:42,920 Speaker 2: we've started to see a bit of a rotation over 187 00:09:42,920 --> 00:09:45,360 Speaker 2: the last few weeks. If you think about the equity 188 00:09:45,400 --> 00:09:47,880 Speaker 2: markets of late, there has been a rotation out of 189 00:09:48,160 --> 00:09:51,760 Speaker 2: US step in particular into European markets, that's really a 190 00:09:51,800 --> 00:09:54,800 Speaker 2: signal for a value rotation. And as a result, gold 191 00:09:54,840 --> 00:09:58,120 Speaker 2: miners and anything sort of value orientated has become back 192 00:09:58,160 --> 00:10:01,000 Speaker 2: into favor. And we think that, but I guess, you know, 193 00:10:01,040 --> 00:10:04,360 Speaker 2: potentially going forward, it could be further I guess links 194 00:10:04,400 --> 00:10:05,600 Speaker 2: to this potential rotation. 195 00:10:06,400 --> 00:10:08,160 Speaker 1: Cameron, thank you for talking to Fear and Greed. 196 00:10:08,800 --> 00:10:09,200 Speaker 2: Thank you. 197 00:10:09,480 --> 00:10:13,280 Speaker 1: That was Cameron mccomack, Senior portfolio manager at van k. 198 00:10:13,400 --> 00:10:15,600 Speaker 1: This is the Fear and Greed Business Interview. Remember this 199 00:10:15,679 --> 00:10:18,720 Speaker 1: is general information only and you should see professional advice 200 00:10:18,800 --> 00:10:21,680 Speaker 1: before investing. Join us every morning for the full episode 201 00:10:21,720 --> 00:10:24,120 Speaker 1: of Fear and Greed Daily Business us for people who 202 00:10:24,160 --> 00:10:33,320 Speaker 1: make their own decisions. I'm Sean Elmer. Enjoy your day.