Gold Exchange Traded Funds are an excellent way for investors to gain exposure to this valuable metal without needing to worry about shipping, insuring and storing physical bullion themselves. Before purchasing one of these ETFs, investors should carefully consider their financial goals and risk tolerance before making their purchase decision.
Avoid investing in leveraged gold ETFs that use financial derivatives as betting instruments; such investments can exacerbate losses as well as gains.
iShares Gold Trust
iShares Gold Trust is one of the most widely held gold ETFs available, tracking the price of physical gold bullion. Backed by a substantial portfolio of bullion bars stored in vaults in Zurich and London respectively, this fund boasts more than $2.4 billion as assets under management while charging 17 bps annually in fees.
Gold ETFs give investors exposure to the price of gold while simultaneously diversifying their portfolios. Unfortunately, not all gold ETFs are equal – some may incur high expenses which reduce returns, or may lack an impressive track record or fail to match your objectives. Therefore, you should carefully consider your investing goals before selecting an ETF to invest in.
Before selecting a gold ETF to purchase, ensure it offers an affordable expense ratio to maximize returns while minimizing fees on your portfolio. The top low-cost gold ETFs typically charge no more than 0.15% in management fees and trading spreads.
Another thing to keep in mind when investing in gold is whether to follow its spot price or the stock prices of public companies that mine it. Tracking spot price provides more direct investment access and may have less correlation to stocks, making it suitable during turbulent markets. Conversely, public company investments may present more volatility which may not suit all investors.
Investors should avoid leveraged gold ETFs, which use financial derivatives and borrowed money to place bets on future prices. Furthermore, investors should eschew gold exchange-traded notes which do not own the metal they represent and can be more speculative than ETFs. Furthermore, profits made when selling ETFs will likely be taxed as collectibles instead of ordinary investments, which could reduce returns substantially.
Market Vectors Gold Miners ETF
Gold can provide a refuge during times of economic and market instability. Due to its expense and limited storage space requirements, investors often turn to exchange traded funds instead. ETFs track gold’s price without actually owning it directly – here are some excellent options for investing in gold ETFs.
Are You Seeking Gold Miners ETF As Part Of Your Portfolio? | VanEck Vectors Gold Miners ETF Provides Cost-Effective Exposure If you want to add precious metal exposure without paying excessive costs, VanEck Vectors Gold Miners ETF may be your perfect solution. This ETF tracks the performance of gold mining companies, investing both small and large mining firms. Additionally, its expense ratio stands at just 0.3%!
Another advantage of this ETF is its diversity. Newmont Mining holds nearly 10% of assets; however, smaller mining firms could possibly grow faster than larger rivals.
However, this ETF suffers from lower liquidity than some of its rivals on this list, making it less suitable for traders but more suitable for long-term buy-and-hold investors.
Your choice of gold ETF should depend on both your risk tolerance and investment horizon. If you prefer lower risks, invest in SPDR Gold Shares or iShares Gold Trust; for more speculative investors who can tolerate some risk, gold miner stocks ETFs such as GDX might offer greater gains due to operational leverage; however this comes with additional risks as well. Regardless of which ETF you select, always take the time to examine each one’s underlying assets, fund performance in recent years and expense ratio before making any investments.