Gold Rush: Largest Investments In The Precious Metal

Gold is a popular investment for those looking to hedge against stock market uncertainty and inflation. Gold ETFs (exchange-traded funds) are one of the most convenient ways to invest in gold, as they provide instant diversification at a low cost. Some of the most widely held gold ETFs include SPDR Gold Shares, iShares Gold Trust, and VanEck Vectors Gold Miners ETF. These funds either invest directly in physical gold or in companies involved in gold mining. When selecting gold ETFs, investors should consider their financial goals, the fund's performance, expense ratios, top holdings, and assets under management.

SPDR Gold Shares

The investment objective of the SPDR Gold Trust is for SPDR Gold Shares to reflect the performance of the price of gold bullion, less the Trust's expenses. The ETF's sole asset is gold bullion, which it stores in secure vaults. It is the largest and most liquid gold ETF and is favoured by institutional investors such as pension funds. The costs associated with buying shares in the secondary market and the payment of the Trust's ongoing expenses are lower than the costs of buying, storing and insuring physical gold.

iShares Gold Trust

One of the main advantages of iShares Gold Trust is its low expense ratio, which makes it a cost-effective way to invest in gold. The fund is also large, with over $51 as of October 28, 2024, making it less susceptible to market manipulation and reducing the risk of trading at a significant premium to its net asset value.

By investing in iShares Gold Trust, individuals can gain convenient and diversified access to the gold market, making it a good option for those looking to protect their portfolios against inflation and other risk factors. The fund is traded on the New York Stock Exchange Arca under the ticker symbol IAU.

VanEck Vectors Gold Miners ETF

The VanEck Vectors Gold Miners ETF (GDX) is an exchange-traded fund (ETF) that offers investors exposure to gold mining companies. Established in May 2006, it was the first gold miners ETF in the United States. The fund seeks to replicate the performance of the NYSE Arca Gold Miners Index, which tracks the overall performance of companies involved in the gold mining industry.

As of April 22, 2021, the ETF had approximately $15.1 billion in total assets, composed of 53 companies. The top five holdings as of March 31, 2021, were Barrick Gold (11.54%), Franco-Nevada (7.85%), Wheaton Precious Metals Group (5.63%), and Newcrest Mining (5.17%). The portfolio is rebalanced quarterly to reflect changes in the benchmark index.

The VanEck Vectors Gold Miners ETF is considered a speculative investment due to the volatile nature of gold prices and the potential for mismanagement by gold mining companies. However, it can be a good option for investors who want to gain exposure to the gold market through mining companies, as shares of mining companies can sometimes outperform the price of gold.

The fund had a management fee of 0.50% and an expense ratio of 0.52% as of April 22, 2021. Morningstar rated the ETF with three out of five stars overall as of March 31, 2021, indicating that it is a middle-of-the-pack investment option.

It is important to note that the value of the ETF may not always rise with an increase in gold prices, and a drop in gold prices could negatively impact the fund's performance. Therefore, this ETF is better suited for sophisticated investors who are comfortable with the associated risks.

GraniteShares Gold Trust

The GraniteShares Gold Trust ETF (BAR) is a gold exchange-traded fund (ETF) designed to offer investors exposure to gold and its price changes without having to directly purchase, store, and resell the physical asset. The ETF seeks to provide investment returns that match the performance of gold prices, less trust expenses.

In terms of accessibility, the ETF is listed on NYSE Arca and can be traded through a standard brokerage account. It is also one of the lowest-cost gold ETFs on the market, making it a cost-effective option for investors.

The ETF's custodian is ICBC Standard Bank, one of the few LBMA clearing members with their own vault. ICBC Standard Bank is a full member of the London Bullion Market Association (LBMA) and a market maker.

SPDR Gold MiniShares Trust

The investment objective of the SPDR Gold MiniShares Trust is to reflect the performance of the price of gold bullion, less the fund's expenses. The fund's shares are designed for investors who want a cost-effective and convenient way to invest in gold. The expense ratio of the fund is 0.10%.

The SPDR Gold MiniShares Trust is similar to other SPDR gold products, representing fractional, undivided beneficial ownership interests in the trust, which holds physical gold bullion and, occasionally, cash. The launch of the SPDR Gold MiniShares Trust offers a more affordable way for investors to access the gold market, intending to provide them with a lower total cost of ownership over longer periods.

The SPDR Gold MiniShares Trust is a good option for investors seeking a low-cost method to invest in gold without owning it directly. However, due to its smaller size, it has less liquidity than larger gold ETFs, which could impact pricing during volatile market periods. Nevertheless, its ultralow expense ratio makes it ideal for mirroring the price of gold over the long term.

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