What You Need to Know About the Top 5 Gold ETFs
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Investing in gold has always been considered a safe haven, especially during times of economic uncertainty. Gold exchange-traded funds (ETFs) offer an efficient way to gain exposure to this precious metal without the hassle of owning physical gold. In this article, we will explore the top five gold ETFs in the market to help you make informed investment decisions.
1. SPDR Gold Shares (GLD)
SPDR Gold Shares is the largest and most popular gold ETF with approximately $60 billion in assets under management (AUM). GLD tracks the price of gold bullion and seeks to replicate its performance by holding gold bars in secure vaults. This ETF has an expense ratio of 0.40% which means that investors pay $40 annually for every $10,000 invested.
2. iShares Gold Trust (IAU)
iShares Gold Trust is another major gold ETF with an AUM of around $30 billion. Similar to GLD, IAU aims to track the price of gold bullion by holding physical gold in vaults. The key advantage of IAU over GLD is its lower expense ratio of 0.25%, which translates to lower annual fees for investors.
3. Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL)
Aberdeen Standard Physical Swiss Gold Shares ETF focuses on providing investors with a secure and cost-effective way to access the gold market. SGOL has an AUM of approximately $2 billion and holds physical gold bars in vaults located in Switzerland. Its expense ratio stands at 0.17%, making it one of the more cost-effective options for investing in gold.
4. VanEck Merk Gold Trust (OUNZ)
VanEck Merk Gold Trust offers an innovative approach to investing in gold by providing investors with the option to take delivery of physical gold if desired. This $250 million AUM gold ETF not only tracks the price of gold bullion but also allows investors to exchange their shares for gold coins and bars. OUNZ has an expense ratio of 0.40%.
5. Invesco DB Gold Fund (DGL)
Invesco DB Gold Fund is a unique gold ETF as it does not hold physical gold like the other ETFs mentioned above. Instead, DGL invests in gold futures contracts to gain exposure to the gold market. This approach appeals to investors who prefer a more liquid investment with a lower expense ratio of 0.78%. However, this method exposes investors to additional risks related to futures contracts, which should be considered before investing.
In summary, these top five gold ETFs provide diverse options for adding gold exposure to your investment portfolio. Each ETF has its advantages and drawbacks depending on factors such as cost, holding structure, and investment strategies. Before making any investment decisions, assess your risk tolerance and investment objectives carefully and consult with a financial professional if needed.