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Tuesday, Sep 24
Bargain spotted in gold closed-end funds
- If you have to own gold, Central Fund of Canada (CEF +0.6%) is the way to go, writes Morningstar's Mike Taggart, who notes it's trading at an 8.3% discount to NAV - more than two standard deviations outside the norm. As CEF holds just gold and silver bullion (55/45 mix), the big discount suggests a great deal of bearish investor sentiment is priced in.
- "There is no fundamental reason for the share price to have fallen significantly faster than its NAV," writes Taggart, and the fund gets a Bronze Morningstar rating - meaning it's expected to outperform all other funds in the commodity precious metals category over the next five years.
- Central GoldTrust (GTU -0.6%) also makes the undervalued list.
- Gold ETFs: GLD, IAU, SGOL, PHYS, AGOL, DGL, UBG, DGP, UGL, DZZ, GLL, DGZ, UGLD, DGLD, GLDI.