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Would like info on the Sprott Trusts (Gold, Silver, and Platinum/Palladium)

AlaskaDan
edited February 2013 in Fund Discussions
Am interested in getting more information for the following closed-end funds before investing any money:

Sprott Physical Gold Trust (PHYS)
Sprott Physical Silver Trust (PSLV)
Sprott Physical Platinum and Palladium Trust (SPPP)

Two topics that come to mind immediately are:

T1. Pros and cons of holding the units in a retirement account vs. non-retirement account

T2. U.S. federal income tax issue (will be considered a U.S. Unitholder). Can anyone speak to this issue assuming that I plan to make and maintain a QEF (Qualified Electing Fund) with respect to the units (will need to file IRS Form 8621 for any year that the Trust is a PFIC (Passive Foreign Investment Company)). Aside: Since I most likely will NOT meet the minimum requirements for redeeming units for the physical stuff, any units redeemed will be for cash.

Any other information in regards to these three Trusts will be greatly appreciated.

Thanks in advance to all those who care to share their wisdom.

AlsakaDan

Comments

  • scott
    edited February 2013
    I think really becomes what are you looking for in terms of gold - a short-term (more of a trade?) or long-term (maybe a year or more?)

    I wouldn't think there would be a substantial difference in terms of retirement or non-retirement and am not sure about PFIC issues, but I'd guess it's similar (just more paperwork hassle) to a K-1. If you're just looking for a trade, I'd think there would be easier ETFs to do that with (although some of the commodity ETFs do produce a K-1)

    I'll also note that Sprott Resource Corp (SCPZF.pk) has substantial holdings in physical gold, but is a mix of a lot of different things. (public/private investments, farmland, etc etc) That just started paying a monthly div.
  • MarkMark
    Seriously, if you want exposure to the precious metals, it is probably better that you just purchase the bullion outright and and stick it in the backyard or a safe deposit box somewhere.
  • ronorono
    Howdy,

    1. In or out of retirement only matters to the degree the taxes do on any gains (see #2).

    2. As Scott said, you'll need to handle the K1 and all that.

    feh. I don't really see any of these funds suitable for trading the pm market, however, the ETFs are no better if it's in a taxable account.

    Mark brought it up but it would help frame my response if we knew what your goal was. Is this to be an relatively permanent investment, a speculative play, a momentum play, what?

    peace,

    rono
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