ASA: Gold Could Be Good Right Now, And This Fund Is A Nice Way To Get It

2025-04-04 17:29:55 ET

Summary

• ASA Gold and Precious Metals Limited offers exposure to gold and precious metals, outperforming the S&P 500 and gold itself over various periods.
• The ASA closed-end fund invests in mining companies rather than physical metals, providing an alternative way to get exposure and expertise in the industry.
• Despite a low yield of 0.18%, the fund's long-term capital appreciation and tax efficiency make it an attractive option for long-term investors.
• A good case can be made for gold right now, given that the changing dynamic in global trade is creating much uncertainty.
• Trading at an 11.89% discount, ASA Gold and Precious Metals Limited presents a good value, especially in times of market uncertainty and volatility.

ASA Gold and Precious Metals Limited ( ASA ) is a closed-end fund ("CEF") that, as the name suggests, provides investors with exposure to gold and other precious metals. This is something that could prove to be a very attractive proposition right now, given that gold prices (XAUUSD:CUR) have been incredibly strong in recent years. For example, gold has actually beaten the S&P 500 Index ( SP500 ) over the past three years:

This chart shows the spot price of gold (black line) against the S&P 500 Index (blue line). As we can clearly see, gold has gained 57.54% over the period, whereas the S&P 500 Index is only up 21.01%. This has not only been the case for the past three years, either. In fact, gold has substantially outperformed the S&P 500 Index since the start of the 21st century. Here is the same chart, this time with the starting date changed to January 1, 2001:

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