Hi, r/investing.
I've a n00b question that i really cant figure out.
I decided that I would like to allocate a small percentage of my portfolio to commodities for the diversification.
I'm a non-US national living in Singapore, so for tax reasons I'm almost entirely invested in Irish domiciled funds that trade on the London Stock Exchange, traded in USD.
I found a USD Gold ETf that is Irish domiciled (Though it doesn't really matter as they don't pay dividends) and was planning to invest $15,000 into the fund.
This would take $15,000 out of my account and lock it up in the ETF and give me $15,000 exposure to the price of Gold.
Like this: IGLN
However, I saw my portfolio also has the ability to trade, what I assume is a forex position, on XAUUSD.
Like this: XAUUSD
This would give me $15,000 exposure to the price of gold but on Margin and leave the majority of the money in my account that I could then invest elsewhere.
If my desire is simply to add some exposure to Gold to my portfolio as a diversification, what are the downsides to buying the XAUUSD vs the Gold ETF?
I have a large margin in my brokerage (around $200k) that is currently entirely unused and would be able to produce enough cash to close the position if it went against me by 5-10k.
What am I not understanding about this and why would I not do this rather than locking up funds in an ETF?
Submitted December 23, 2017 at 08:38AM by agentapelsin http://ift.tt/2l38ruT
