Central Fund of Canada

Located in Calgary, Alberta, Canada, the Central Fund of Canada (symbols: NYSE Amex U.S. - CEF, TORONTO - CEF.A) is a mixed gold and silver related exchange traded fund, traded on both the Toronto Stock Exchange in Canada and the New York Stock Exchange in the United States. It is a closed end specialized investment holding company that is required to hold the majority of its net assets in a combination of gold and silver, and a percentage amount of cash funds. Central Fund's bullion is stored on an allocated and fully segregated basis in the underground vaults of the Canadian Imperial Bank of Commerce and going by 2008 data, the company holds over 28.4 tonnes of gold assets and 1423.66 tonnes of silver assets in its reserve.

Going by 2005 data, on average at that time, there were 50 ounces of silver for every ounce of gold. During this time, the Central Fund of Canada reported net assets of $541 million, which was made up of 53.9% gold, 44.5% silver, and 1.6% cash.

There are several advantages to using the Central Fund of Canada to invest. These include that it’s easy to make a bullion investment because the Central Fund shares trade in the same fashion as any other stock (this goes for all exchange traded funds). All you need is a broker, the same as if you were buying a share. There aren’t any contracts, delivery logistics, storage or anything else that may give conventional bullion investors a headache. The only fees you have to pay are the regular fees to your broker. There are no tax or transaction fees. Gold stocks are correlated to the market price of gold and because a lot of gold miners run on fixed costs, profits generally increase as the price of gold increases. Thus whilst investing in physical gold may see returns, returns from gold related stock is at a higher ratio. The more expensive the gold, the wider the profit margin, the more value the stock has.

The Central GoldTrust (symbol: TSX - GTU.UN (Cdn.$) and GTU.U (U.S.$) NYSE Amex - GTU(U.S.$) is a gold holding trust created to buy and hold substantially all of its assets in long-term holdings of gold bullion. The primary objective of GoldTrust is to provide a secure, convenient, low-cost, exchange-tradeable alternative for investors interested in holding gold bullion. GoldTrust's physical gold is also stored in the underground treasury vaults of CIBC.

Silver Bullion Trust (TSX - SBT.UN (Cdn.$) and SBT.U (U.S.$) is set up exactly the same as Central GoldTrust except that it holds silver bullion only.

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