A Gold Etf

When it comes to investing in gold there are two main ways to do it buy physical gold or invest through an exchange traded fund etf although the etf route comes with an annual expense ratio.

A gold etf.

A gold etf is a commodity exchange traded fund that can be used to hedge gold commodity risk or gain exposure to the fluctuations of gold itself. All numbers are as of august 1. The average expense ratio is 0 59. Below we ll look at the top 3 gold etfs as measured by 1 year trailing total returns.

With 28 etfs traded in the u s. Because of its direct gold pricing there is a complete transparency on the holdings of an etf. These units are traded on the exchange like a single stock of any company. Markets gold etfs gather total assets under management of 140 45b.

Gold may have ended 2016 on a negative note but the yellow metal is now up 7 since january. Etf issuers are ranked based on their aggregate 3 month fund flows of their etfs with exposure to gold. If an investor has increased risk on his portfolio assets when the price of gold rises owning a gold etf can help reduce risk in that position. The gold etf industry is dominated by two very similar funds that are focused on owning gold bullion rather than investing in stocks of companies that mine and produce gold the spdr gold trust.

3 month fund flows is a metric that can be used to gauge the perceived popularity amongst investors of different etf issuers with etfs that have exposure to gold. Further due to its unique structure and creation mechanism the etfs have much lower expenses as compared to physical gold investments. Gold etfs are passive investment instruments that are based on gold prices and invest in gold bullion. An exchange traded fund etf is a fund which is designed to reflect the movement in price of an underlying asset or index or basket of stocks.

Gold etfs have been created to track the price of gold or the inverse price of gold for times when the investor believes the gold price will fall or an index based on gold mining companies. Gold etfs can be found in the following asset classes.