Free Writing Prospectus
Van Eck Merk Gold Trust
Merk Gold Webinar
0001546652
Pursuant to 433/164
333180868
Merk Gold Webinar
What’s next for gold?
Gold in a portfolio?
Merk Gold Webinar
www.merkinvestments.com 1 2015 Merk Investments
Please read important risk disclosure informa7on towards the end of this presenta7on.
Notes
Indices and terms referred to in this presenta1on may include the following:
U.S. Dollar (DXY) Index and Inverse DXY: measures the value of the United States dollar rela7ve to a sta7c basket of currencies with Euro (EUR) 57.6% weight,
Japanese yen (JPY) 13.6%, Pound Sterling (GBP) 11.9%, Canadian dollar (CAD) 9.1%, Swiss franc (CHF) 3.6% and Swedish krona (SEK) 4.2% weight. The DXY is a
generally wellknown measure of the value of the US dollar versus major foreign currencies, and as such makes a relevant reference point for direc7onal
currency strategies. The inverse of the DXY is the value of the currency basket rela7ve to the U.S. dollar, i.e. short dollar and long foreign currencies. Because the
Merk Hard Currency Fund is long foreign currencies (and therefore short dollar), using the inverse DXY allows for the logical comparison of performance rela7ve
to the Fund.
Bloomberg Dollar (BBDXY) Index: tracks the performance of a basket of ten leading global currencies versus the U.S. dollar, weighted by the share of
interna7onal trade and FX liquidity.
Deutsche Bank Currency Returns (DBCR) Index: an equalweighted blend of the most widely used investment strategies among ac7ve currency managers. It
captures long term systema7c returns available in the world currency markets. As a nondirec7onal index, the DBCR provides a useful comparison to absolute
return currency strategies like the Merk Absolute Return Currency Fund.
BloombergJP Morgan Asian Currency (ADXY) Index: a trade and liquidity weighted index of a basket of Asian currencies, excluding the yen, compared to the
U.S. dollar. Because the Merk Asian Currency Fund invests in a basket of Asian currencies, using the ADXY allows for a logical comparison of performance rela7ve
to the Fund.
JPMorgan 3Month Global Cash Index: measures the performance of money market securi7es denominated in foreign currencies.
CiJgroup 3Month U.S. TBill Index: an index that tracks the performance of U.S. Treasury bills with a remaining maturity of three months.
S&P 500 Total Return Index (SPXT): a broadbased measurement of changes in stock market condi7ons based on the average performance of 500 widely held
common stocks. Performance figures assume that all dividends are reinvested.
MSCI EAFE (Europe Australasia Far East) Index: a free floatadjusted market capitaliza7on index that is designed to measure the equity market performance of
developed markets, excluding the US & Canada. As interna7onal equity investment returns are a combina7on of equity returns and currency returns, the MSCI
EAFE provides a useful comparison to a strategy including U.S. equi7es and currencies, like the Merk Currency Enhanced US Equity Fund.
MSCI EAFE US $ Hedged Net Index: a currency hedged variant of the above, designed to represent the return without the currency exposure if the index.
MSCI Emerging Markets (EM) Index: a free floatadjusted market capitaliza7on index that is designed to measure equity market performance of emerging
markets.
Barclays Capital Aggregate US Bond Index: is a broadbased benchmark that measures the investment grade, U.S. dollardenominated, fixedrate taxable bond
market, including Treasuries, governmentrelated and corporate securi7es, MBS (agency fixedrate and hybrid ARM passthroughs), ABS, and CMBS.
FTSE NAREIT US All REITs Index: spans the commercial real estate space across the US economy. It provides exposure to all investment and property sectors.
DJUBS Commodity Total Return Index: a diversified benchmark for commodi7es’ fully collateralized returns.
Barclays US TIPS Index: measures the performance of the US Treasury Infla7on Protected Securi7es ("TIPS") market.
VIX Index: Chicago Board Op7ons Exchange (CBOE) Vola7lity Index, which shows the market’s expecta7on of 30day vola7lity.
Alpha: measures riskadjusted return. The excess return of the fund rela7ve to the return of the benchmark is the fund’s alpha.
Beta: measures systema7c risk based on the covariance of the porholio’s return with the return of the overall market. By defini7on the market has a beta of 1.
Sharpe RaJo: measures the excess return per unit of risk in an investment asset or a trading strategy.
CorrelaJon: is a measure of how assets move in rela7on to each other. Low or nega7ve correla7on indicates returns are less likely to move in tandem. This may
smooth out overall returns of a porholio, a poten7al diversifica7on benefit.
Standard DeviaJon: a measure of vola7lity.
OUNZ Disure
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This material must be preceded or accompanied by the prospectus. Before invesJng you should carefully consider the Fund’s
investment objecJves, risks, charges and expenses. This and other informaJon is in the prospectus, a copy of which is available
at www.merkgold.com/prospectus. Please read the prospectus carefully before you invest.
Inves1ng involves risk, including possible loss of principal. The Trust is not an investment company registered under the
investment Company act of 1940 or a commodity pool for the purposes of the Commodity Exchange Act. Shares of the Trust are
not subject to the same regulatory requirements as mutual funds. Because shares of the Trust are intended to reflect the price of
the gold held in the Trust, the market price of the shares is subject to fluctua1ons similar to those affec1ng gold prices.
Addi1onally, shares of the Trust are bought and sold at market price, not at net asset value (“NAV”). Brokerage commissions will
reduce returns.
Commodi7es and commodityindex linked securi7es may be affected by changes in overall market movements and other factors
such as weather, disease, embargoes, or poli7cal and regulatory developments, as well as trading ac7vity of speculators and
arbitrageurs in the underlying commodi7es.
Trust shares trade like stocks, are subject to investment risk and will fluctuate in market value. The value of Trust shares relates
directly to the value of the gold held by the Trust (less its expenses), and fluctua7ons in the price of gold could materially and
adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be
more or less than the value of the gold represented by them. The Trust does not generate any income, and as the Trust regularly
issues shares to pay for the Sponsor’s ongoing expenses, the amount of gold represented by each Share will decline over 7me.
Inves7ng involves risk, and you could lose money on an investment in the Trust.
The request for redemp7on of shares for gold is subject to a number of risks including but not limited to the poten7al for the price
of gold to decline during the 7me between the submission of the request and delivery. Delivery may take considerable 7me
depending on your loca7on.
For a more complete discussion of the risk factors relaJve to the trust, carefully read the prospectus. The sponsor of the Trust is
Merk Investments LLC (the “Sponsor”). Van Eck Global and Foreside Fund Services, LLC, provides markeJng services to the Trust.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Gold Price
Gold Price
(1/1/1970 9/30/15)
Source: Merk Investments, Bloomberg
Annualized Return: 7.86%
Correlation to Equities: 0.00
Gold…
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Gold’s average annual return since 1970 was 7.86%,
even including 2013’s major correction.
Gold price measured in U.S. dollars per Ounce.
Correla7on: a measure of how two securi7es or asset classes move in rela7on to each other.
Gold…
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Where is the Gold ?
5.7 billion ounces above ground
– Could fit in 2 Olympic size swimming pools
Jewelry
– About half of all above ground gold held as jewelry
Industrial, Medical Use
– 8.3% above ground stock in industrial, dental use
Investment
– About 36.9% of above ground gold as investment
– 17.3% official sector versus 19.5% by private sector
Source: CPM Yearbook 2013, Thomson Reuters GFMS Gold Survey 2014
Gold…
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Supply & Demand
Jewelry, Industrial, Medical Use
Investment
– Public sector
– Private sector
Mining
– About 1.7% of global stock produced in 2013
Recycled Gold
Source: CPM Yearbook 2013, Thomson Reuters GFMS Gold Survey 2014
Gold…
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Gold doesn’t change, but value of U.S. dollar ?
Supply & Demand of U.S. dollar driven by outlook on
– Monetary policy
– Fiscal policy
– Economy, balance of trade
– …
Fishing for Gold?
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Axel Merk:
“Gold may
perform well
if investors
don’t get a
posi7ve real
rate return
on cash”
Financial Repression?
Holding cash yields negative real returns
Gold paying no interest a competitor?
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A Fed’s “promise”?
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A “promise” to be “behind the curve” ?
“The Commisee currently an7cipates that, even ater
employment and infla7on are near mandateconsistent
levels, economic condi7ons may, for some 7me, warrant
keeping the target federal funds rate below levels the
Commisee views as normal in the longer run.”
Since the spring of 2014, the Federal Reserve Open Market Commisee
(FOMC) has included the above paragraph in its Statement. We
interpret this to be a commitment by the Fed to be “behind the curve,”
meaning that rate hikes may not keep up with up7cks in infla7on,
poten7ally leading to lower real interest rates. Real interest rates are
interest rates net of infla7on.
Fiscal Outlook
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“A Government in debt does not have
interests aligned with citizens that
are savers” – Axel Merk
Exis7ng debt burden En7tlement obliga7ons of an ageing popula7on
Consequences of climate change (really??)
LongTerm Fiscal Challenges Facing the U.S. ? Financing…
Fiscal Outlook
Can we afford positive real interest rates?
Gold paying no interest a competitor?
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20%
10%
0%
10%
20%
30%
40%
2015
2020
2025
2030
2035
2040
2045
2050
Federal Revenue, Spending and Deficit as Percentage of GDP
Spending as % of GDP
Revenue as % of GDP
Deficits as % of GDP
Source: Merk Investments, Congressional Budget Office (CBO) !
Data from CBO July 2014 Projection (Alternative Fiscal Scenario)! Merk Investments, LLC!
Forecasts are inherently limited
Fed independence ?
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Purchasing Power of the US Dollar 19702014
Value of the Dollar
Source: Merk Investments, Bureau of Labor Sta7s7cs ˝ Merk Investments LLC
Calcula7on based on consumer price index; December 1970 = 100%. Data as of September 2014.
Cash a Diversifier?
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Why Diversify?
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An investment may be a good portfolio diversifier, if it…
…helps preserve or enhance purchasing power
…is expected to have a low correla7on to porholio
Bear Market
Diversifier?
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Gold a Diversifier for Bear Markets ?
Gold price measured in U.S. dollars per Ounce.
0%
1000%
2000%
3000%
4000%
5000%
6000%
0%
1000%
2000%
3000%
4000%
5000%
6000%
7000%
8000%
9000%
S&P 500 v.s. Gold
S&P 500 (LHS) Gold (RHS)
Source: Merk Investments, Bloomberg, Shiller
Period: 01/01/1971 09/30/2015 (Monthly
Data)
?
Merk Investments, LLC
Personal Gold
Standard
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What is a personal gold standard?
Recognizing cash is not a “safe” asset
Considering gold in investment alloca7on
Gold in Porholio
Optimal Portfolio of Gold and S&P 500
7/31/1971 – 2/28/2014
Optimal Portfolio
Gold ?
100%
S&P 500 ?
Gold 100%
29%
S&P 500
71%
Annualized Return 9.89% 8.53% 10.29%
Annualized Risk ?
Standard Deviation of ?
Returns
12.43% 20.23% 15.40%
Sharpe Ratio ?
Highest Ratio is Optimal
Portfolio
0.39 0.17 0.34
˝ 2014 Merk Investments Not investment advice
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According to Modern Portfolio Theory, what would have been the
Optimal Portfolio allocation to gold since 1971? (Aug 1971 – Feb 2014)
Historically, gold has mitigated risk and served to improve the riskreturn
profile of a traditional portfolio.
Source: Bloomberg, Merk Investments. Op7mal Porholio, as defined by Modern Porholio Theory, is a hypothe7cal example for illustra7ve purposes, and is not indica7ve
of an actual product. Past performance is no indica7on of future performance. Not investment advice.
Modern Porholio Theory: theory of finance that asempts to maximize porholio expected return for a given amount of porholio risk by op7mizing the propor7ons of
various assets. Op7mal Porholio, as defined by the Modern Porholio Theory, is the mix of investments that provides the highest riskadjusted return.
Sharpe Ra7o: a measure of the excess return per unit of risk in an investment asset or a trading strategy.
S&P 500 Index: a broadbased measurement of changes in stock market condi7ons based on the average performance of 500 widely held common stocks. Performance
figures assume that all dividends are reinvested.
Gold
? %
Stocks
? %
Bonds
? %
Gold
? %
Bonds
? %
Stocks
? %
Ways to Invest in
Gold
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Gold miners
“Juniors”
“Majors”
Gold mutual fund
Paper gold
Openend gold trusts
Closedend gold trusts
Coins under the masress
OUNZ
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Van Eck Global. and Merk Investments.
Announce Marke7ng Agreement
OUNZ
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OUNZ seeks to provide investors with:
Convenient and costefficient way to
buy and hold gold through an exchange
traded product
OpJon to take delivery of physical gold
if and when desired
OUNZ Advantages
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Merk Gold Trust shares are traded on NYSE ARCA
under Liquidity the symbol “OUNZ”
OUNZ holds gold bullion as allocated London Bars
Investors have the op7on to take delivery of their
gold in exchange for their OUNZ shares Deliverability
Proprietary process for conversion of OUNZ shares
into gold bars and coins in denomina7ons investors
may desire for delivery Conver7bility
Taking delivery of gold is not a taxable event, as
investors merely take possession of what they
already own: their gold Tax Efficiency
It is expected that, if an Investor submits shares to the Trust, the exchange for physical gold will generally not be a taxable event.
See tax discussion in prospectus. Not tax advice; please consult with a tax professional for tax advice.
Invest in physical gold with ease of ETF, option to take delivery
Fees to Take Delivery
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Processing Fee = Exchange Fee + Delivery Fee
Exchange Fee
No Delivery Fee for lower 48 States
Merk may waive or reduce fees
Please refer to the prospectus for additional information regarding processing fees. Any waiver or reduction in applicable processing fees will
be published on the Trust’s website available to any eligible Investor/Delivery Applicant.
Type of Gold Fee per
Ounce
Minimum
Fee
1 Ounce Bars $30 $1,200
1 Ounce Other Coins $40$42 $1,600
1 Ounce American Eagle & Buffalo Coins $60 $2,500
10 Ounce Bars $25 $1,000
London Bars $32 none
OUNZ
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October vault inspec7on in London by
Axel Merk
Upcoming fiscal year audit
Disclosure
This presentation was prepared by Merk Investments LLC. Information presented is for general
information purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy,
any investment security. The information presented is the current view of the presenter and subject to
change without notice. An investment in a strategy described herein has risks, including the risk of
losing some or all of the invested capital. Before embarking on a described investment program, an
investor should carefully consider the risks and suitability of the described strategy based on their own
investment objectives and financial position. Past performance is no guarantee of future results.
The information presented may include opinions, projections and other “forwardlooking statements.”
Due to numerous factors, actual events may differ substantially from those presented. Merk
Investments assumes no duty to update any such forwardlooking statements or any other information
or opinions in this document. Any information and statistical data contained herein derived from third
party sources are believed to be reliable, but Merk Investments does not represent that they are
accurate, and they should not be relied on as such or be the basis for an investment decision.
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Merk Gold Resources
www.merkgold.com
Merk Gold
www.merkinvestments.com 26 2015 Merk Investments
Axel Merk
President & CIO
Merk Investments
James Machuga
Advisor Services
James.machuga@merkfunds.com
(650) 323 4341 x 125