Gold exchange-traded funds, or gold ETFs, have risen in popularity among investors who want precious metals exposure.
ETFs are similar to mutual funds in that they track assets such as stocks, bonds, currencies or commodities; a key difference is that ETFs can be bought and sold on exchanges, making them widely accessible. They provide considerable flexibility in implementing various investment strategies and in building investment portfolios.
Gold ETFs are fairly common today, and are a good choice for investors who want to invest in precious metals without trading gold futures or owning physical gold, such as gold coins or bars.
So which gold ETFs are the best? And which ones will provide long-term capital gains? It depends on the investor, but the five gold ETFs below may be worth considering when it comes to getting exposure to the yellow metal. According to ETFdb.com, they were the largest gold ETFs by total assets as of April 11, 2024.
1. SPDR Gold Shares (ARCA:GLD)
Total assets: US$62,750 million
The SPDR Gold Shares tracks the spot price of gold bullion and is determined by market forces in the 24 hour, over-the-counter market for gold. This market accounts for most global gold trade, and any quoted prices available to ETF investors reflect the latest available information.
Physical bullion comprises 100 percent of the ETF’s holdings, and its expense ratio is 0.4 percent. It offers investors a way to invest in gold that is much less costly than purchasing, storing and insuring bars or coins.
2. iShares Gold Trust (ARCA:IAU)
Total assets: US$29,019.7 million
Like the SPDR Gold Trust, the iShares Gold Trust aims to track the spot price of gold bullion. Its expense ratio is 0.25 percent, and its holdings are allocated entirely to physical gold bullion. The aim is for the trust’s value to reflect the performance of the price of gold.
The physical gold the trust holds is in vaults in New York, Toronto, London and other locations. Investors can purchase and sell shares through a traditional brokerage account throughout the trading day.
3. SPDR Gold MiniShares Trust (ARCA:GLDM)
Total assets: US$7,673.1 million
The SPDR Gold MiniShares Trust offers investors one of the lowest available expense ratios for a US-listed ETF backed by physical gold. This ETF represents fractional, undivided beneficial ownership interests in the trust, which holds only physical gold bullion and, from time to time, cash.
4. Abrdn Physical Gold Shares ETF (ARCA:SGOL)
Total assets: US$3,177.57 million
The Abrdn Physical Gold Shares ETF is issued by the abrdn Standard Gold Trust. The trust aims for shares to reflect the performance of the gold bullion price, minus the trust’s operating expenses. The shares trade on an exchange like any other securities, and can be created and redeemed as supply and demand for gold in the market dictates and allows.
The gold that the abrdn Standard Gold Trust owns is held in Zurich, Switzerland, and it conforms to the London Bullion Market Association’s rules for good delivery.
5. iShares Gold Trust Micro (ARCA:IAUM)
Total assets: US$1,168.65 million
iShares Gold Trust Micro ETF is the lowest-cost physically backed gold ETF on the market. Its expense ratio is 0.09 percent. The fund is designed to provide exposure to the day-to-day movement of the price of gold bullion. The underlying gold bars are held in vaults. IAUM is considered a collectible, so investors should understand that long-term gains have significant tax liabilities.
Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.