Although we at BlackRock don’t know each individual buyer of our iShares ETFs—a shame, because if we did, we’d send thank-you notes!—we do have a good sense of how many shares investors are adding and removing from their brokerage accounts each month. And from that data, we can make some reasonable estimates on trends involving investors trading in larger blocks (who tend to be institutions) and smaller volume investors (who tend to be individuals).
So what have we learned from this data? Over the past year, we’ve seen a noticeable shift from larger institutional purchases of gold and silver ETFs to a significant increase in individual investors doing so. Overall during the past year, the total number of accounts holding the iShares Gold Trust (NYSE:IAU) and the iShares Silver Trust (NYSE:SLV) is up 83%, and of those, the majority of new accounts were adding a relatively small amount of shares (i.e. individual investors). Between June 2010 and June 2011, the number of accounts with 1000 shares or less doubled for SLV and almost tripled for IAU (see charts below).
There are a couple of possible reasons for this shift. For one thing, some observers might point to this as a clear sign of performance chasing. With the price of gold up nearly 35% and silver’s price having more than doubled over this time period, you could certainly make the case that some investors are chasing the possibility of continued high returns—not a practice I believe in. Silver in particular has been quite volatile this year and, as Russ pointed out in May, it still looks expensive. Read More
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