Category Archives: Metals

Any Future with Gold?

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Whitworth LLC generates reports using technologies from Microsoft, Apple, ChstGPT, Claude and Google.

ChatGPT said:

To build a well-balanced mix of 3–5 royalty companies that maximizes diversity, stability, and high dividend potential, consider the following curated portfolio:

🥇 Core Holdings (Stable + Dividend Growth)

1. Franco‑Nevada (FNV)

  • Dividend Yield: ~0.9–1.3%, raised for 16–18 consecutive years The Motley Fool Canada+1Investors.com+1

  • Strengths: Debt-free, high-margin, extremely diversified across gold, silver, platinum, and energy in 30+ countriesAInvest

  • Fit: Defensive core foundation.

2. Wheaton Precious Metals (WPM)

  • Yield: ~1.3%; recently increased quarterly dividend policy

  • Focus: ~97% exposure to precious metals—mainly gold and silver—with minor cobalt AInvest+2The Motley Fool+2The Motley Fool Canada+2

  • Fit: Reliable dividend payer with precious-metal concentration.

3. Royal Gold (RGLD)

🌱 Additional Satellite Picks (Boosted Yield & Regional Exposure)

4. Gold Royalty Corp (GROY) (smaller, higher-yield play)

📊 Portfolio Snapshot

Ticker Dividend Yield Dividend Growth Diversification North America Focus
FNV 0.9–1.3% 16–18 years Global metals + energy Moderate
WPM ~1.3% Consistent raises Precious metals heavy High
RGLD ~1.2% 16 years Americas + metals diversification Medium‑High
GROY ~2.6% Newpayer NA royalties only Very High

🧭 Why This Mix Works

  • Stability & Longevity: FNV, WPM, and RGLD bring decades of dividend growth and low operational risk.

  • Diversity:

    • Commodity: Exposure to gold, silver, PGM, and energy.

    • Geography: A blend of global vs. Americas-centric portfolios.

    • Size: Includes both large-cap blue chips and a higher-yielding small-cap.

  • Dividend Profile: Core stocks provide reliable income, while GROY enhances yield without adding large operational risk.

✅ Suggested 4‑Stock Allocation

  1. Franco‑Nevada (FNV) – ~30–35%

  2. Wheaton Precious Metals (WPM) – ~30–35%

  3. Royal Gold (RGLD) – ~25–30%

  4. Gold Royalty (GROY) – ~5–10%

This blend gives you a strong income foundation, superior diversification, and moderate upside via GROY’s growth potential.

Would you like real-time yield breakdowns, NAV-per-share metrics, or dividend coverage ratios for these names?

Relevant Royalty Company News

 

Royal Gold Aims to Boost Scale, Gold Output With $3.5 Billion Sandstorm Gold Acquisition

The Wall Street Journal

Royal Gold Aims to Boost Scale, Gold Output With $3.5 Billion Sandstorm Gold Acquisition
4 days ago

 

Royal Gold agrees acquisitions worth $3.7bn as record prices drive deals

ft.com

Royal Gold agrees acquisitions worth $3.7bn as record prices drive deals
4 days ago
A Majestic Mover: Royal Gold Stock Flirts With Buy Point Amid 58% Run As Earnings Spike

Investors.com

A Majestic Mover: Royal Gold Stock Flirts With Buy Point Amid 58% Run As Earnings Spike
Mar 21, 2025

 

 

 

Sources

 

 

You said:
hiw do GGN and others deliver over 7% annual return?
ChatGPT said:

GGN (GAMCO Global Gold, Natural Resources & Income Trust) delivers a 7–13%+ annual return primarily due to a covered-call strategy layered on a gold/natural resource stock portfolio, combined with monthly cash payouts—but it comes with trade-offs.

🧩 How GGN Pays Out 7%+

  1. Covered-call overlay
    GGN holds gold and resource stocks like Barrick, Newmont, Chevron, and Exxon, then sells call options on them. This brings in premiums—around $0.03 per share monthly—which help sustain high payouts and reduce NAV volatility Reddit+15AInvest+15Seeking Alpha+15GuruFocus+7Dividend.com+7CEF Connect+7.

  2. Monthly distributions & income coverage

    • It distributes ~$0.36/year per share—equating to ~8–10% annual yield .

    • Q1 2025 coverage was around 1.2× distributable cash flow, meaning payouts were backed by operations, not fully from capital AInvest.

  3. Return of Capital (ROC) inclusion

    • About 15% of distributions are classified as ROC, lowering your cost basis rather than reflecting actual earnings Wall Street Numbers+15AInvest+15Reddit+15.

    • This means you’re getting back part of your original investment, not purely income.

⚠️ Key Risks

  • ROC reliance: As ROC rises (~15–20%), it may indicate weakening operations .

  • Capped upside: The covered-call strategy limits growth during bullish commodity runs Investing.com+3AInvest+3The Street+3.

  • Premium valuation: Trading near premium to NAV reduces future upside potential Seeking Alpha+10Investing.com+10The Street+10.

  • High fees/discount erosion: Closed-end fund fees and potential NAV decline could erode returns long-term .

🗣️ What Reddit Investors Say

“GGN is yield trap. High dividends, high ER and crap returns. There are better PM investments.” Reddit+1Seeking Alpha+1

“The yields will never increase… CC ETF will lag underlying over 30 years… yield strategy sacrifices growth.” Reddit

🧭 Practical Takeaway

Feature Benefit Trade-off
High monthly yield 7–13%+ cash payouts May include ROC, reducing long-term NAV
Income stability Call premiums provide cash flow Growth capped during strong rallies
Downside buffering Mitigates volatility on commodity declines Fund expenses & option losses can reduce NAV

Ideal for: Investors seeking cash income and comfortable with sacrificing growth for stability.

Not ideal for: Those seeking capital appreciation via full participation in commodity bull runs.

✅ Bottom Line

Yes, GGN delivers ~7–13% annual return through its income-first strategy, combining covered calls with portfolio distributions. But it sacrifices upside, uses ROC, and has higher costs. It’s a high-income vehicle, not a total-return or growth-focused investment.

Would you like a comparison of other high-yield precious metal CEFs/ETFs using similar strategies?

 

Sources

 

You said:
yes please suggest something better than GGN that avoids the downsides you mentioned
ChatGPT said:

To find a better income vehicle than GGN—with less reliance on return-of-capital (ROC), more NAV upside, and fewer trade-offs—consider these alternative strategies:

🛡️ 1. Covered-Call Equity ETFs with More Balanced Outcomes

  • JEPI (JPMorgan Equity Premium Income ETF)

    • Yield: ~10.4%

    • Strategy: S&P 500 equity exposure with strategic call overlays, delivering high income with more upside participation than aggressive covered-call fundsReddit+12Reddit+12Reddit+12.

    • Provides a more balanced path vs. GGN’s gold-only focus and heavy ROC.

  • DIVO ETF

    • Yield ~5–6%, plus capital gains (~6% p.a.), combining dividend-paying equities with mild covered-call writingInvestopedia.

    • Offers reliable monthly distributions and capital appreciation potential, making it superior to GGN for total return.

2. Precious Metal Royalty Funds with Yield + Growth

These avoid ROC structure entirely by owning royalty/streaming firms that collect real revenue and distribute genuine dividends:

Though yields are below GGN’s ~8–10%, they offer superior stability, long-term compounding, and no NAV drag.

3. Gold Royalty/Streaming ETFs

For a more diversified portfolio of royalty companies in one fund:

📊 Quick Comparison Summary

Option Yield ROC Risk NAV Upside Equity Participation
GGN 7–13% ✅ High 🚫 Limited 🚫 Limited
JEPI ~10% ❌ Low 👍 Good 👍 Strong
DIVO ~5–6% + cap ❌ Low 👍 Good 👍 Moderate
FNV/WPM/RGLD ~1–1.3% ❌ None 👍 Strong Moderate
ROYL / GOAU ~1–1.5% ❌ None 👍 Strong Moderate

🧭 Final Take

  • Want high income with limited downside? Go with JEPI (S&P 500 covered call) or DIVO—both offer regular payout plus upside participation.

  • Want precious metal exposure without ROC risk? Combine FNV, WPM, and RGLD for stable, dividend-growing royalty plays.

  • Prefer a one-stop royalty ETF? Try ROYL or GOAU.

Let me know if you’d like real-time NAV discounts, historical returns, or a combined portfolio strategy!