The UT endowment unloaded $375M of its $1.4B in physical gold (PHYS) in the quarter ended Feb....


The UT endowment unloaded $375M of its $1.4B in physical gold (PHYS) in the quarter ended Feb. 28, reinvesting the proceeds in gold futures ($75M) and developed market equities ($300M). CEO Bruce Zimmerman - noting little's changed in the bullish thesis - says the fund's gold exposure remains the same due to the leverage involved with gold futures.

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Comments (3)
  • howard26
    , contributor
    Comments (261) | Send Message
     
    Wow...that is an interesting one! Someone letting go of physical and going into paper.

     

    Anyone want to discuss the advantages to this?
    25 Apr 2013, 12:51 PM Reply Like
  • kmi
    , contributor
    Comments (4587) | Send Message
     
    It's not precisely paper, as the market current states, it is futures which provide leverage. Also, (PHYS) is an ETF and depending on how strong your gold buggery strain is, it can also be considered 'paper'. Theoretically, both signify ownership of the real underlying commodity.

     

    The point to pay attention to, however, is that futures provide leverage, amplifying gains or losses, therefore allowing them to obtain what they believe is similar exposure with less capital, while using the remaining capital to obtain exposure to stocks.

     

    And I think the key is there: they think stocks will perform, and much like everyone else right now, they think that the US is poised to outperform in most of the most likely macro scenarios so gold is less important to them.
    25 Apr 2013, 01:09 PM Reply Like
  • evan.prospect
    , contributor
    Comments (704) | Send Message
     
    Either they are going to look really smart or really, really, really dumb.
    25 Apr 2013, 01:11 PM Reply Like
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