Selecting the ideal gold ETF depends on your financial goals. When making this choice, take into account factors like expense ratios, top holdings, technical indicators and analyst reports as well as any potential tax ramifications of investing.
GLD is the largest gold ETF and provides exposure to its price. With proven performance and low fees, this fund makes an attractive option for investors.
GLDM
Gold ETFs provide investors with an efficient and cost-effective means to gain exposure to precious metals. Before investing, however, it is crucial that investors understand the historical performance and costs of each ETF as well as other important considerations such as its market capitalization and liquidity.
Though some gold ETFs invest directly in physical gold bullion, others focus on mining companies or related activities to diversify your portfolio with lower expense ratios and possibly provide greater diversification benefits.
GLDM follows the London Bullion Market Association gold price and is structured as a grantor trust, meaning each share price represents one-tenth of an ounce of gold. As it has much lower trading costs per share and smaller asset base than GLD as well as lower annual fees it may be ideal for retail investors seeking an accessible low-cost gold ETF option.
IAU
Gold investors tout its many virtues as an effective hedge against inflation and uncorrelated with stocks and bonds; its value can increase during periods of global instability. But before you purchase any gold ETF, consider its expense ratio; this factor plays a significant role in its long-term performance.
The top gold ETFs have low expense ratios. Funds with low fees have had the greatest returns over the last 12 months; as illustrated below. This chart displays these gold ETFs’ returns before fees.
This physically-backed gold ETF tracks the LBMA Gold Price by investing in audited gold bars stored in vaults. With its relatively low expense ratio and transparent track record, as well as high liquidity and an options chain that offers great potential returns compared to GLD, iShares Gold ETF also specializes in smaller mining companies that produce other metals beyond gold; with Newmont Mining and Freeport-McMoRan accounting for approximately 10% each of its holdings in this ETF’s assets.
SGOL
An ETF provides an efficient way of diversifying your portfolio with gold. However, not all gold ETFs are equal – some may incur higher expenses and this could significantly diminish returns. Before selecting one, it’s crucial that you take note of performance metrics and fees to find an investment suitable for you.
The SGOL provides exposure to physical gold by investing in bullion bars stored around the world in vaults. This fund tracks the London Bullion Market Association Gold Price through these bars, with an expense ratio that is lower than GLD. Furthermore, this fund owns shares in some of the leading gold mining companies such as Newmont Mining Corp, Wheaton Mines Plc, Franco Nevada Plc and Goldcorp PLC.
When selecting a gold ETF, prioritize those which are physically backed by gold bullion deposits rather than using financial derivatives like futures contracts to track its price. Furthermore, fees have an enormous effect on your net returns so look out for one with low fees that maximizes them.
SGOG
ETFs offer an alternative to physical gold in terms of cost and management: ETFs hold and manage its underlying asset more cheaply and conveniently, making them an excellent way to diversify a portfolio and buy/sell easily. When selecting an ETF with gold holdings it is important to carefully consider its expense ratio, since an excessive expense ratio could drastically lower returns.
GLDM, managed by SPDR and offering one of the lowest expenses among gold ETFs, tracks gold bullion prices with reduced expenses compared to GLD and IAU. However, its liquidity may be inferior and trading commissions and bid-ask spread fees may be more costly.
GDX invests in foreign small-cap gold mining companies that focus on producing not only gold but also silver and copper. Although GDX has lower market cap than other gold mining ETFs, its consistent returns have allowed for lower tax rates as collectibles are taxed at collectibles rates instead of investment tax rates.
