In November of 2004, a prospectus was filed with the SEC that proposed to sell “baskets” of shares in a Trust that was given gold bullion in return.

For years a great deal of debate occurred as to the advantages and disadvantages of such a vehicle. Today, with a market cap exceeding $35 billion, not many can argue that the idea has been embraced by the market.

Still, today there are many who have done a thorough examination of the GLD prospectus, and have asked some very good questions that so far have gone unanswered.

For a good article on things to be cautious of in terms of GLD, you can reference this article:

http://www.rapidtrends.com/2009/02/13/owning-gld-can-be-hazardous-to-your-wealth/

After reading the new prospectus for the “ETFS PRECIOUS METALS BASKET TRUST” filed with the US SEC on Feb 5th 2010, it is clear that the structure of this ETF is very similar (almost identical) to the GLD ETF.

This means it has all of the same pitfalls.

I recently read a quote that went like this “Just because a thousand people believe in something foolish, does not mean its still not foolish. A great consensus of opinion does not make a thing true.”

To download the full prospectus in PDF format, right click and “save as” here:

http://www.rapidtrends.com/downloads/etf-basket-prospectus.pdf

This entry was posted on Tuesday, February 9th, 2010 at 10:18 am and is filed under Archived. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.