Global Gold ETF Investment Guide and Comparison

Investing in gold through an ETF (Exchange-Traded Fund) has become increasingly popular in recent years, offering a convenient and cost-effective way to gain exposure to the precious metal.

Gold ETFs are traded on major stock exchanges, allowing investors to buy and sell shares throughout the day.

The largest gold ETFs are listed on the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE), with the SPDR Gold Shares (GLD) being the largest and most widely held.

Investors can also consider other options like the iShares Gold Trust (IAU) or the ETFS Physical Gold Shares (SGLD), each with their own unique features and fees.

You can easily add gold to your portfolio by buying an ETF that owns gold, such as the iShares Gold Trust (IAU), which has $32.7 billion in assets under management.

The iShares Gold Trust (IAU) is one of the biggest gold ETFs by assets, with a low expense ratio of 0.25%. This makes it a cost-effective way to access the gold market.

If you want a more leveraged exposure to gold, you can buy an ETF that owns shares of gold mining companies. Some popular options include the BMO S&P/TSX Equal Weight Global Gold Index ETF (ZGD) and the iShares S&P/TSX Global Gold Index ETF (XGD).

Here are some key characteristics of these ETFs:

The iShares Micro is a low-cost gold ETF that's perfect for beginners working with smaller dollar amounts. Its shares cost around $26 at present, making it an even more digestible number compared to other gold ETFs.

This ETF has a 0.09% annual fee, which is significantly lower than many other gold ETFs. It's also one of the best ETFs for beginners because of its lower cost.

The iShares Micro has one of the lowest fees among gold ETFs, making it an attractive option for long-term investors. Its lower cost can add up over time, especially for investors with smaller portfolios.

Here are some key features of the iShares Micro:

The iShares Micro is a great option for investors who want to add gold to their portfolio without breaking the bank. Its low cost and lower fees make it an attractive option for long-term investors.

You can buy and sell SPDR ETFs like shares through a stock broker, making them flexible and easy to trade.

Frequent trading can significantly increase commissions and other costs, potentially offsetting any savings from low fees or costs.

Commodities investing, including gold, can be quite volatile due to various factors such as market movements and inflationary trends.

Investors may have difficulty liquidating an investment position without taking a significant discount from the current market value, which can be a problem with lightly traded securities.

Investing in commodities, like gold, is not suitable for all investors due to the significant risks involved.

The value of the Shares of the Trust may fall or rise, and past performance figures are not necessarily indicative of future performance.

Investors have no right to request the Sponsor to redeem their Shares while they are listed, and redemption can only be executed in substantial size through authorized participants.

Listing on the Singapore Exchange Securities Trading Limited does not guarantee a liquid market for the Shares, and they may be delisted from the SGX.

If you're expecting gold prices to rise, you have several ETF options to consider. You could buy an ETF that owns gold, like the SPDR Gold Shares (GLD), which has $71.7 billion in assets under management.

Gold investors typically tout several virtues of the yellow metal, including providing a hedge against inflation and growing in value amid uncertainty. The SPDR Gold Shares is the oldest U.S.-traded gold ETF, debuting in November 2004.

The SPDR Gold Shares has a relatively high expense ratio of 0.40%, but it's extremely liquid and has tight bid-ask spreads. This makes it a popular choice for traders.

You might be thinking about adding gold to your portfolio since gold prices are at 5-year lows. In addition to gold prices being well off their 2011 highs, gold can provide diversification benefits to a portfolio of stocks and bonds.

Here are some key facts about the SPDR Gold Shares:

The SPDR Gold Shares is a great option for investors looking to add gold to their portfolio, but it's worth considering other options like IAU, which has lower expenses and a smaller size.

Investing in gold company shares can be a smart move, especially if you're looking for a more hands-on approach to investing in the gold market.

The BMO S&P/TSX Equal Weight Global Gold Index ETF (ZGD) invests in shares of gold mining companies, but with a twist - it weights them equally, rather than by size. This helps avoid having a large exposure to any one company.

The iShares S&P/TSX Global Gold Index ETF (XGD) also invests in gold mining companies, but with a 25% weight limit on any one company.

If you're looking for a more aggressive approach, the Horizons BetaPro S&P/TSX Global Gold Bull Plus ETF (HGU) seeks to provide 200% of the daily performance of the S&P/TSX Global Gold Index.

However, keep in mind that HGU is rebalanced daily, which may not be ideal for long-term investments.

Here are some key facts about these ETFs:

It's worth noting that some of these ETFs, like HGU, have higher fees and expenses compared to other investment options.

When selecting a Gold ETF, it's essential to consider factors beyond just return. You should look at the fund size, cost, age, currency hedge, instrument type, and replication method.

The largest Gold ETFs are Invesco Physical Gold with a fund size of 16,138 million EUR and iShares Physical Gold ETC with a fund size of 15,973 million EUR.

The cost of Gold ETFs can vary, with some having a TER (Total Expense Ratio) of 0.00% p.a. like Xetra-Gold and EUWAX Gold, while others have a TER of up to 0.59% p.a. like Xtrackers Physical Gold EUR Hedged ETC.

Here's a list of the Gold ETFs mentioned in the article, sorted by fund size:

Considering these factors will help you make a more informed decision when selecting a Gold ETF.

The price of gold can be a stabilizing force in turbulent financial times, especially for equity and bond portfolios.

Gold is easily invested in through listed products like ETFs or ETCs, which track the spot gold price closely after deducting management fees.

The minimal bid-ask spread of exchange-traded gold products is a significant advantage over direct trades in gold bullion.

This is largely due to the large 12.5kg bullion held and traded at fund level.

Currently, gold is tracked by 19 ETFs and/or ETCs.

Besides gold products in US dollars, there are also currency-hedged products available.

Comparison is a crucial step in selecting the right Gold ETF or ETC for your investment needs. You'll want to consider factors such as return, size, cost, age, currency hedge, instrument type, and replication method.

To make a sound decision, you can compare all Gold ETFs/ETCs in detail or in a chart. This will help you visualize the differences between various options. For example, the Invesco Physical Gold ETC and the iShares Physical Gold ETC are both physically backed, have a TER of 0.12% p.a., but the Invesco Physical Gold ETC has a larger fund size at 16,138m EUR.

The Xetra-Gold ETC stands out with a TER of 0.00% p.a., making it a low-cost option. However, it has a smaller fund size of 13,420m EUR. On the other hand, the Amundi Physical Gold ETC (C) has a smaller fund size of 5,249m EUR but is still a physically backed ETC.

It's also worth noting that some Gold ETFs/ETCs offer currency hedging, which can be beneficial for investors who want to protect their investments from currency fluctuations. For example, the Xtrackers IE Physical Gold EUR Hedged ETC Securities and the WisdomTree Physical Gold - EUR Daily Hedged offer currency hedging in EUR.

Here is a list of the top 3 cheapest Gold ETFs/ETCs by total expense ratio:

Ultimately, the best Gold ETF or ETC for you will depend on your individual investment goals and preferences. Be sure to do your research and compare different options before making a decision.