Flexible Plan Investments has launched The Gold Bullion Strategy Fund (QGLDX).
The mutual fund seeks to generate returns reflecting daily changes in the price of gold bullion. This is the first time this type of gold bullion fund has been offered to retail investors through a mutual fund product.
Until now, gold bullion index strategies were only available through exchange-traded funds (ETFs). However, many ETFs that invest in commodity futures contracts are subject to Schedule K-1 tax reporting rules, which can cause investors to have to delay in filing their tax returns while at the same time requiring them to file tax returns in multiple states and deal with unrelated business taxable income. The Gold Bullion Strategy Fund will distribute the conventional Form 1099, familiar to most mutual fund investors, rather than multiple Schedule K-1 tax forms and does not generate unrelated business taxable income.
"Gold bullion has been viewed as a consistent hedge against inflation by many advisors and their clients, but when the asset class finally bore fruit over the past decade, gold mining equity funds did not track the gains well, and only ETF investors could access the robust returns delivered by gold bullion," says Jerry Wagner, president of Flexible Plan and one of the fund’s portfolio managers. "The launch of The Gold Bullion Strategy Fund enables us to offer our four gold-focused separately managed account strategies to a wider array of investors through a mutual fund vehicle."
The fund will invest in gold bullion ETFs and derivatives in seeking to reflect daily changes in the price of gold bullion. In addition, the Fund will allocate assets to investment-grade corporate notes and bonds in order to produce interest income, accomplish its tax strategy and preserve principal.
Flexible Plan and Advisors Preferred serve as sub-advisor and advisor to the fund, respectively. Z. George Yang, director of research at Flexible Plan, is the fund’s portfolio manager together with Wagner.
