It has become obvious that ETFs offer individual investor diversification opportunities that a single common stock cannot. While mutual funds are able to achieve a similar diversification, ETFs are able to save investors a significant percentage of their after-tax returns when compared to their mutual fund counterparts with the liquidity factor of trading at all times of the trading day. Additionally, ETFs maintain unique attributes which make them even more effective than actively managed mutual funds. For instance, ETFs do not deal directly with individual investors. Rather, creation units are sold to institutional investors in exchange for a portfolio of securities that match the ETF’s investment goals. In turn, the institutional investor can sell the ETF shares to individual investors in the secondary market
Gold ETFs are unconventional and smart ways of investing in gold and are listed on the stock exchange. The cost of investing in them is low and quality is not questionable. Transacting in Gold ETF is at the prevailing market price. While investing in gold the smart way, you should evaluate the Percentage of Gold Holdings, Tracking Error, Expense Ratio and the Performance Track Record. So Instead of looking at ETF reviews, some of the best Gold ETFs have been listed below.
1. ProShares UltraShort Gold
ProShares UltraShort Gold offers 2x daily shot leverage to the Gold bullion. It is a powerful tool for investors who have a bearish short-term outlook for gold bullion. It should be avoided by investors with low-risk tolerance or those who use a buy and hold strategy. The ETF’s leverage resets on a daily basis, resulting in the compounding of returns when you hold it for multiple periods.
2. The Royal Mint Physical Gold ETC Securities
The Royal Mint Physical Gold ETC Securities invests in gold with a total expense ratio of0.22% per annum. It replicates the performance of the underlying index with a collateralised debt obligation which is backed by physical holdings of the precious metal. The Royal Mint Physical Gold ETC Securities has 302 million Euro assets under management. It is older than 1 year and is domiciled in Ireland.
3. VanEck Vectors Junior Gold Miners ETF
Of all the ETFs mentioned in this list, the VanEck Vectors Junior Gold Miners ETF offers immense potential as it focuses on smaller mining companies. These smaller mining companies known as junior gold miners are largely in the exploration stage. They can expand their production faster, delivering higher returns than their peers. However, one small misstep such as cost overruns on mine developments can prove costly to investors as they lack the scale of their larger peers.
4. GraniteShares Gold Trust
With assets under management of over $1.6 billion, the GraniteShares Gold Trust has achieved so in less than 3 years of trading after it entered the market in August 2017. The list of gold bars that the ETF consists of is updated daily and audited bi-annually. The trust cannot hold derivatives nor can it lend any of its holdings. It is listed n NYSE Arca and can be traded through a normal brokerage account.
5. SPDR Gold Shares
SPDR Gold Shares is a U.S. – traded gold ETF and prototypical gold fund, representing a fractional interest in physical gold bullion stored in vaults. For many investors, the transaction costs related to the Shares are expected to be lower than the costs associated with the purchase, storage and insurance of physical gold. The price, holdings and net asset value of the Gold Shares, as well as market data for the overall gold bullion market, can be tracked daily at The SPDR Gold Shares official website.
Conclusion
ETFs provide the most convenient as well as the cheapest way to access gold trading. Investors can reap the benefits of Gold investments without taking in the responsibility of the underlying assets.