Affluent investors choosing from commodity based exchange traded funds are more interested in gold than oil or silver, but energy company stocks trump ETFs in desirability, according to new research from Spectrem Group.
Fifty-three percent of investors with $500,000 in investable assets said they were interested or very interested in energy company stocks, while gold ETFs ranked highly with 30 percent of this affluent group. Twenty-eight percent expressed similar interest in oil ETFs and 24 percent gave the same rating to silver ETFs.
“Our data indicates that even with oil, gold and silver trading at highs, Affluent Investors are more comfortable with equities than the more alternative investments such as commodity ETFs,” said Tom Wynn, director of affluent research for Spectrem Group. “Their attitude also reflects more moderate to conservative asset allocation models that give least weight to alternative investments.”
All three commodities have been trading at record highs. Oil prices rose sharply following the political unrest in the Middle East and Northern Africa. Also rising food and energy costs fueled fears of inflation. Gold and Silver are often seen as an investment which offers protection against inflation.
Investors interested in gold and silver were much more likely to prefer ETFs, which trade like stocks and provide more liquidity, than coins, bars and certificates. Those interested in participating in the energy upswing greatly preferred energy stocks and oil ETFs to oil futures and limited partnerships. Only 17 percent of affluent investors said they were interested or very interested in these products.
Less than one-fourth said they were interested or very interested in gold coins, while 19 percent expressed similar interest in gold bars and 13 percent, in gold certificates. Silver earned the lowest rating, with 18 percent of investors saying they were interested or very interested in silver coins and 15 percent giving similar ratings to silver bars.