Investing in gold has quietly become one of the best performing assets this year, according to VanEck CEO Jan van Eck. In a recent interview on CNBC’s “ETF Edge,” van Eck highlighted gold as a hedge against political cycles and emphasized its strong performance so far in 2020. The price of gold has hit a record high 37 times this year and is up 28% since the beginning of the year.
Van Eck, whose firm manages the VanEck Gold Miners ETF, believes that foreign investments in bullion will continue to drive the price of gold higher. This trend is also expected to benefit gold mining companies, which have started to outperform the commodity in recent weeks. The VanEck Gold Miners ETF is up 31% year-to-date, indicating a positive outlook for the sector.
In addition to the gold trade, van Eck also discussed the artificial intelligence (AI) trade, noting that investors remain enthusiastic about this sector. He mentioned the launch of the VanEck Fabless Semiconductor ETF, a new offering that excludes companies that manufacture their own chips like Intel. The top holdings of this ETF include Nvidia, Broadcom, and Advanced Micro Devices, as reported by FactSet.
Van Eck highlighted the appeal of investing in companies like Nvidia, which do not manufacture their own chips but instead focus on design and innovation. This strategy has proven successful for Nvidia and other fabless semiconductor companies. Since its launch in late August, the VanEck Fabless Semiconductor ETF has seen a modest gain of half a percent.
Overall, van Eck’s insights suggest that both the gold trade and the AI trade have strong potential for investors. While gold offers a stable hedge against political uncertainty, AI and semiconductor companies continue to drive innovation and growth in the technology sector. By diversifying their portfolios with exposure to these sectors, investors can position themselves for long-term success in the market.
