Investors looking for exposure to precious metals through ETFs have many options available to them in terms of precious metal ownership and tracking, while some focus on owning physical bars of precious metal while others monitor price changes in the market.
But each precious metals ETF carries its own risks, so investors should carefully evaluate each fund’s underlying assets, expense ratio and liquidity before making their choice.
iShares Silver Trust ETF (SLV)
This ETF provides an easy and cost-effective way to gain exposure to silver without the risks associated with futures contracts and provides more realistic pricing of its holdings. However, silver markets can be volatile and long-term holding may result in losses.
SLV aims to reflect, at any point in time, the price of silver less its expenses and fees minus brokerage commissions – this means if silver prices increase then SLV’s shares should gain in value as will brokerage commissions that reduce your returns.
The net asset value (NAV) of the iShares Silver Trust is calculated as the weighted average of daily closing prices from major world silver markets as published by LBMA, less its expenses and fees. This NAV may change depending on market conditions without prior notice and should therefore only be taken as indicative value.
iShares Gold Trust ETF (IAU)
IShares Gold Trust provides investors with exposure to gold without the complications associated with buying, transporting and storing physical bullion. IAU boasts one of the lowest expense ratios among commodity ETFs and provides investors with exposure to an asset considered safe haven status.
As with any investment, iShares Gold Trust shares involve risk, including potential principal loss. Their market price may differ from their net asset value per share as calculated by the trustee; which uses London PM Fix prices each business day (except where unavailable ) as its basis; brokerage commissions and expenses could reduce returns further.
This fund can be purchased through most brokerage accounts. The option chain display of this product shows current as well as historical option prices. Click here for an instructional video on how to interpret option time and sales.
Market Vectors Gold Miners ETF (GDX)
Market Vectors Gold Miners ETF (GDX) offers investors an easy and accessible way to participate in the precious metals mining sector. As an index-based ETF that tracks NYSE Arca Gold Miners Index performance, this fund boasts 49 holdings with an annual expense ratio of just 0.51%.
Gold mining stocks tend to move in tandem with gold prices, making them an excellent option for traders who wish to speculate on price movements within the sector. GDX should not be seen as suitable investment options for people bullish on gold itself.
One of the key metrics used to assess gold miner profits is free cash flow. This indicator of operating cash flow minus capital expenditures serves as an indication of how quickly a miner can spend down its reserves; higher free cash flow numbers indicate greater profitability for gold miners like GDX; thus making this fund potentially attractive long-term investors.
Market Vectors Gold Miners ETF (GDXJ)
Market Vectors Gold Miners ETF (GDXJ) gives investors exposure to small-cap gold mining companies known as junior miners, which typically offer higher potential returns than more established gold mines but also carry more risk. The fund holds a global portfolio of these junior gold miners that together reduces any single region or company risk.
This ETF seeks to replicate, as closely as possible before fees and expenses, the price and yield performance of MVIS Global Junior Gold Miners Index. As with any exchange-traded fund, however, its performance may fluctuate over time.
Physical gold prices have seen significant gains over the last several months and are currently trading at their highest point since 2023, leading analysts to predict further increases in precious metals sector gains. One way GDXJ gives you exposure is as an exchange-traded fund or ETF offering exposure – particularly useful if you believe in gold but do not wish to own physical precious metals such as physical gold.
