Best Gold ETFs

If you’re interested in investing in gold, there are many different ways to do so. Some people will purchase gold coins or bullion, while others look for alternatives to holding physical assets.

The good news is that there are choices for everyone who really wants to dive into the gold markets. 

Gold ETFs are one such solution, and there are plenty of options to choose from so that you can find the solution you feel will work best for your family’s needs. 

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In this guide, we will walk you through some of the best gold ETFs on the market, sharing details about them, and some other great information you should know. Check it out!

What is a Gold ETF? 

An ETF is an exchange traded fund. Much like mutual funds, these funds hold a compilation of stocks and other assets that are all combine together into a fun with a specific purpose in mind. These funds trade just like stocks on the exchange markets, which is how they differ from mutual funds. 

So, when you break it down, you see that they are like stocks in the fact that they trade on an exchange and like mutual funds in the way that they hold a variety of assets in a single fund.

When you put that together, a gold ETF is an exchange traded fund with a heavy focus on gold-related assets. 

A gold ETF is going to track itself against the gold index and try to beat it, or at least match it. Some funds will hold physical gold as their assets, while others might have stocks or even mutual funds that are related to the gold market. These details may be important to know as you look at what to invest in. 

Different Types of Gold ETFs

As you’re checking out the options, you will find there are different types of gold funds and holdings. In general, you will see these types of choices. 

• Inverse gold ETF
• Gold miner ETF
• Leveraged gold ETF
• Smart beta gold ETF
• Traditional gold ETF

A traditional gold ETF will primarily hold gold bullions and coins as the assets within.

When you own the ETF, you own part of the gold that is held by the fund owner. 

Each of these ETFs takes a different approach. 

Inverse Gold ETF

The idea of inverse gold ETFs is to move the opposite direction as gold bullion in the market. It wants a reverse effect. So when the gold bullion prices drop, then this ETF should realistically move up. And it works the same when gold bullion markets go up, this ETF will likely go down. 

This is sometimes used as a leveraging strategy so that investors see the upsides with traditional gold ETFs as well as the upsides when the gold market is going down. 

Gold Miner ETF

A gold miner ETF is going to push its focus towards the mining of gold. It may still hold some gold assets, but a lot of the holdings will be for companies that mine gold. The gold miner ETFs typically move in coordination with the gold market. 

Leveraged Gold ETF

A leveraged gold ETF wants to provide returns that exceed the gold markets. In most cases, their goal is to actually be able to double the returns of gold. The holdings can vary, but they are gold related in most cases. The leverage ratio simply depends on the ETF itself, but it should be clear to you what that is. 

Smart Beta Gold ETF

Smart beta ETFs are very similar to a standard ETF; however they are often slightly more detailed and monitored. These ETFs don’t just want to match the index but want to beat it instead. So they watch a variety of factors in order to accomplish that feat. They will have gold holdings of some sort, but they will also have positions meant to hedge those holdings. 

The Top Gold ETFs to Consider

We’ve sorted through some gold ETF choices to provide you with options. The majority of our top picks are going to be focused on gold holdings, but you will find some variations among the different funds. 

Take a look at these top gold ETFs on the market. 

1. SPDR Gold Shares (GLD)

The SPDR gold ETF is one of the most popular ETFs on the market when it comes to investing in gold. It is also the largest fund out there.

They have reached more than £50 billion in assets that are managed under the fund, which is astronomical.

Visit SPDR Gold Shares

There are several different SPDR funds out there, and their gold fund has been a hit. The holdings are primarily made up of gold bars and they track against the gold bullion markets. Not only are investors seeing high performance numbers, but they’re experiencing an average return of more than 30% in recent years. 

Another great thing about the SPDR gold shares is that the expense ratio is really low. It’s one of the lowest out there and falls in at only about .4%. This is one of the easier funds to invest in as it is available on many different exchanges. 

2. iShares Gold Trust (IAU)

The iShares Gold trust ETF is another popular choice. Their 5-year return number is well over 50%, showing that they have a pretty good track record of success.

Where the SPDR fund had a nice low expense ratio, iShares blows that out of the water with their .25% expense ratio. This is one of the lowest expense ratios on the books.

Visit iShares Gold Trust

iShares does have several different gold-related ETFs, so if you feel like you want to go with this company but you’re not sure if this is the one, check out their alternative options. Those include iShares Gold Producers, iShares MSCI Global Gold Miners, iShares Physical Gold, and some additional choices. 

This gold trust ETF tracks right along the price of gold on the spot. They invest in actual gold bars and coins as part of the holdings. Those assets are then stored safely in many different worldwide locations so that currency fluctuation is accounted for. This is how they keep their costs down. 

3. Sprott Gold Miners ETF (SGDM)

If you’re interested in an ETF that is relative to gold miners, check out the Sprott gold miner ETF. They track against the Solactive Gold Miners Custom Factors Index and have an outstanding annualized rate of return. They hold 30 different large cap mining companies from US and Canadian exchanges.

They take into account factors such as cash flow, free cash flow yields, revenue growth, and debt to equity ratios. This helps them determine the best mining companies to invest in and they balance the ETF accordingly. This is a closely monitored ETF that is rebalanced quarterly.

Visit Sprott Gold Miners ETF

They take into account factors such as cash flow, free cash flow yields, revenue growth, and debt to equity ratios. This helps them determine the best mining companies to invest in and they balance the ETF accordingly. This is a closely monitored ETF that is rebalanced quarterly. 

Because of the tight management, the expense ratio is slightly higher on this fund. It’s not awful, but it’s certainly ticking up there quite a bit at .52%. That being said, their 5-year return shows about 46%, which is pretty good. 

4. Abrdn Standard Physical Gold Shares ETF (SGOL)

Some funds focus solely on holding physical gold and this is one of them. It’s a top choice in the UK because it has a track record of high performance. This is one of the best performing funds in the gold sector, sporting five-year returns of close to 55%.

They invest in physical gold and then they store the bullions and other holdings in specific locations. It’s a UK-based fund so the holdings are in secure sites in countries like London, Switzerland, and Zurich.

Visit Abrdn Standard Physical Gold Shares ETF

Interestingly enough, while this is a UK fund, it’s set up with US currency as the base currency, which pits it against the S&P 500. However, the expense ratio beats out all of the others you will find on this list, measuring in at only .17%. That’s pretty amazing as far as expenses go. 

5. VanEck Merk Gold Trust ETF (OUNZ)

The VanEck gold trust ETF takes a slightly different approach. This fund is known for being unique and allowing your investments, as well as theirs, to be completely liquid in nature. Not only can you invest in the fund, but investors can actually cash out their shares for physical gold bullion instead of money.

It’s almost like purchasing gold, but through a whole different process. Of course, you can simply hold the ETF shares but it’s nice to know you can exchange for the actual gold if you want to, right?

Visit VanEck Merk Gold Trust ETF

Because of the unique nature of the fund, their expense ratio is slightly higher. It’s not awful, and it’s not the highest but it rings in around .40%, which is getting towards the high end. Their annualized returns show just over 53% for the past five years. 

6. Royal Mint Physical Gold (RMAU)

The Royal Mint fund actually falls under ETC, which is an exchange traded commodity. This fund operates under the same concepts, it just is part of the commodities tier. If you’re looking for something that is specific to the UK, it’s a pretty great choice. It’s one of the best in the area.

The unique details about the Royal Mint ETC are that it’s operated and backed through a European sovereign mint facility, so it looks just a little bit different in management and design. It also may feel more relatable or realistic for some investors because of the Royal Mint ties.

Visit Royal Mint Physical Gold

The Royal Mint produces gold, and they comply with strict standards of the London Bullion Market Authority’s Responsible Gold Sourcing policy as they do so.

This is one of the most sustainable policies in the world, which offers some security to the investment in a way. It also could make this a potential fit for those looking for sustainable or ethical investing choices. 

Choosing a Gold ETF for Your Portfolio

These are some top choices on the markets for gold ETFs. There are several other options out there, some of which will fall into mining capacities, while some might hit the different targets that we mentioned earlier in this guide. 

It’s up to you to look around and determine what you feel is going to be the best fit for your portfolio. Every investor has different needs, varying risk profiles, and specific things they look for. Keep your preferences in mind as you seek to choose a gold ETF option. 

Here are a few things you may want to consider. 

Type of ETF You Want

The first thing to determine is what type of gold ETF you want. Do you want an ETF that holds physical gold assets in secure locations, or are you looking for an ETF that supports gold mining and other gold-related companies? 

Perhaps you’re interested in an inverted gold strategy or even a leveraged gold strategy. There are so many different choices. If you’re not quite sure where to begin, you can always choose something like the ultra-popular SPDR or even Aberdeen. 

The beauty of this is that the decision is yours to make! 

Get to Know the Underlying Assets

An ETF is a compilation of assets. The asset holders are required to disclose what those assets are as well. You can find write-ups and analysis data that will detail exactly what is held in any one fund. You can also check out how closely they are managed and how often they rebalance the funds as well. 

Fees & Expenses 

Every ETF is going to charge some sort of fee. These fees are not necessarily something you will see just posted at random to your account, but they are accounted for in the management of the fund. 

A good way to get a feel for fees and expenses is to check out the expense ratio. These can vary quite a bit but the majority of gold ETFs range from .17% to .52%. It is possible to find them higher as well. The more management or demand a fund has, the more their expenses might add up. It simply depends on the fund. 

This likely won’t make or break your final decision, but you certainly should be aware of those expenses. 

Track Record of Success

Finally, look at their track record. Most of these funds are pitted against gold prices or an index that is specific to gold. You can find those fund-specific details pretty easily. Do a little bit of basic research and see what kind of returns the gold ETFs you are interested in have had. 

You can look at a 12-month return for recent performance, but we also recommend considering the 5-year annualized returns. This gives you a clear picture of their returns over a longer period so you can ascertain whether they have had ongoing success. 

Final Thoughts

Gold ETFs are a great way to invest in gold without actually having to go out and buy gold bullion or figure out a safe way to store it. You just need a trading platform that provides access to the ETFs you are most interested in. Do your due diligence and choose a gold ETF that best meets your needs and goals. 

There is no one size fits all approach, but these options might be a great place to start.

Happy trading!

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