Two affordable Gold ETFs for your investment portfolio
ETFs offer the diversification similar to mutual funds. However, the advantage of ETFs is that they may be traded like stocks any time. Most ETFs are passively managed meaning that the MERs are much lower than mutual funds.
Lower interest rates reduce the opportunity cost of holding gold.
Physically backed gold ETFs provide a low-cost, convenient exposure to the metal. Investors should look at the expense ratio, trading costs and gold per share when selecting a gold ETF for their portfolio.
For investors to make money, the price of the ETF has to rise above the price that they paid for, just like any other stock that they buy on an exchange. The only difference is that gold ETFs offers the investor a way to diversify their investment portfolio.
Two newly established gold ETFs that seek to track the price of gold less trust expenses. The two ETFs are:
The table below provides a fact sheet on the two ETFs.
| Description | GraniteShares Gold Trust Shares | SPDR Gold MiniShares Trust |
|---|---|---|
| Exchange | NYSE ARCA | NYSE ARCA |
| Ticker symbol | BAR | GLDM |
| Assets under management | $557 million | $868 million |
| MER | 0.17% | 0.18% |
| Inception date | August 31, 2017 | June 25, 2018 |
| Shares outstanding | 39,400,000 | 61,500,000 |
An investment in allocated physical gold bullion requires expensive and sometimes complicated arrangements in connection with the assay, transportation and warehousing of the metal. These expenses and warehousing needs have made buying physical gold only suitable for large investors. Gold ETFs that hold physical gold as its only asset are a more efficient way for small investors to participate in the gold bullion market.
Below are recent (August 5, 2019) daily price charts of BAR and GLDM:
GraniteShares Gold Trust (BAR):
SPDR Gold MiniShares Trust (GLDM)
