With GLD topping the US only ETF Portfolio, the interesting question is whether one should pile into Gold. The answer really depends on your investment universe.

In our Long Only ETF universe which includes non-US equity markets, commodities and currencies, Gold ranks #24 out of 35 ETFs in the Universe.

Why the discrepancy? Actually there is no discrepancy. The IRP System is designed to rank a given investment universe. If your investment universe of 20 ETFs is made up of 17 US Equity Sectors, 2 US Bond Sectors and 1 Commodity, then the results are telling you two things. One, that gold is looking better than US equities and bonds. And two, that the falling dollar, rising stocks relationship which has been in place for the last 9 months is either changing or breaking down.

The fact that GLD does not rank as high in the global ETF portfolio is a reflection of the stronger momentum in the Emerging Markets. This is also borne out in our Taiwan Fund Sectors Portfolio.


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