Investing in Gold with ETFs. This May Be the Right Time to Invest in Them!
ETF investors have several choices for gaining exposure to gold including funds that hold physical gold, invest in futures contracts or own gold mining stocks. Leveraged and inverse funds are also available. There is a lot of interest in Gold ETFs these days and since I have already created an exhaustive list of gold mutual funds with their expense ratios, I thought I’d create a list of Gold ETFs too.
Physical Gold
1) SPDR Gold Shares (also known as SPDR Gold Trust / GLD) is part of the SPDR family of exchange-traded funds (ETFs) managed and marketed by State Street Global Advisors. As of September 2010, SPDR Gold Shares is the largest gold exchange-traded product and second-largest exchange-traded fund in the world by market capitalization.
This ETF denotes a share of gold bullion, which is unlike many ETFs which represent ownership in a basket of stocks. SPDR Gold Shares are designed to track the price of a tenth of an ounce of gold. If the share price differs from the gold market price, the fund’s manager exchanges blocks of 100,000 shares for 10,000 ounces of gold. The possibility of such exchanges keeps the ETF price roughly in line with the gold price, although the prices can diverge during each day. With over $35 billion of assets, the SPDR Gold Shares (GLD) is the largest gold ETF. The Gold Shares represent fractional, undivided interests in a Trust that holds physical gold bullion.
2) The iShares COMEX Gold Trust is an exchange traded fund (ETF) traded on the COMEX division of NYMEX. It lets investors participate in the gold market through the securities market. The trust shares are intended to constitute an investment similar to an investment in gold. Each trust share represents a fractional undivided beneficial interest in the trust’s net assets which consist primarily of gold held by a custodian on behalf of the trust. Barclays Global Investors, N.A., a subsidiary of Barclays Bank plc, is the trust sponsor. The Bank of New York is the trustee of the trust, and The Bank of Nova Scotia is the custodian of the trust. iShares is a trademark of Barclays Global Investors, N.A., and has been licensed for use by COMEX.
3) ETFS Physical Swiss Gold Shares (SGOL) also track the price of gold by holding bullion.
Gold Futures
The PowerShares DB Gold Fund (DGL) tracks a rules-based index composed of futures contracts on gold and carries an expense ratio of 0.50%.
Gold Miners
The new Market Vector Gold Miners ETF is the first ETF to track the gold mining sector. It replicates the AMEX Gold Miners Index (GDM) which is composed of 43 individual precious metal stocks. The ETF’s creator, Van Eck Global, is well known in the gold community since they were also the first to introduce a gold mutual fund, way back in 1968. One of the advantages of this ETF is that it is more skewed towards the smaller capitalization gold stocks (compared to say the XAU). and should therefore provide more beta. It is also a good way to play the coming gold stocks bounce, if you don’t want to bother with individual gold stocks. The Market Vectors Gold Miners ETF (GDX) invests in a diversified group of companies involved primarily in the mining of gold. Top holdings include Barrick Gold Corp, Goldcorp and Newmont Mining.
Gold silver terms:
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Gold ! coins ETFs Miners or dont bother?
list of gold silver etfs