Physical gold Exchange Traded Funds (ETFs) are a popular way for private investors to gain access to exposure to the gold spot price. Some investors invest in gold in order to provide an element of a hedge against inflation. Others invest because they like the fundementals driving the price, such as a limited capacity to increase supply quickly, and increasing demand from emerging market growth. Partly many investors have been looking for physical ETFs that store gold in secure bank vaults, due to the increasing criticism of the counterparty risk evident in synthetic gold ETFs.
What follows is a non-exhaustive list of different physical gold ETFs & funds which trade on developed stock markets/fund supermarkets around the world. ETFs do not charge initial fees, but you will have to pay trading commissions to a broker in order to place ETFs into your portfolio. Funds and Trusts often charge initial fees but incurr no brokerage costs. I have included the ticker symbol of each instrument to speed up your research efforts. Financial Expert does not provide professional investment advice, so we encourage you to do your own research. Read our disclaimer.
ETFS Physical Gold – (Ticker PHAU). Note ETFS is the name of the provider.
SPDR Gold Shares – (Ticker GLD). Largest and most liquid gold trust in the world.
ETFS Physical Swiss Gold Share – (Ticker SGOL)
ETFS Physical Asian Gold Share – (Ticker AGOL)
Sprott Physical Gold Trust – (Ticker PHYS) – Note, this is actually a mutual fund and not very liquid.
iShares Gold Trust – (Ticker IAU)
ProShares Ultra Gold – (Ticker UGL) – Note, this is a 2x leveraged ETF.
RBS Gold Trendpilot ETN – (Ticker TBAR)
Julius Baer Physical Gold Fund – (Ticker JBGOCA)
Source Physical Gold ETC – (Ticker SGLD)
Xetra-Gold DB - (ISIN Code DE000A0S9GB0)
Physical gold ETFs are not the only investment option for private investors looking to make profits from gold. For instance, synthetic gold ETFs can be used. I outline all the major strategies open to retail investors in this handy ‘How to Invest in Commodities’ web guide.
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[...] 3. Synthetic ETFs have counterparty risks. The simple fund will take investors money and invest it in a basket of shares or bonds. However some index funds have found that it is cheaper to use derivatives (a promise from another institution, usually a bank) to provide the index returns. These are called synthetic ETFs. Examples would be this list of synthetic gold ETFs. This avoids the practical issues of trading and holding cash, but introduces counterparty risk into the mix. Counterparty risk is the risk that the bank may not be able to meet it obligations, and would default on the derivative contract. In this case, the index fund would collapse. As this is a terrifying scenario, banks put up collateral equal to at least the expected obligations, such that if the bank went bust – the fund could liquidate the securities and pay its members. However, recent concerns have been expressed that banks are taking advantage of the situation by only offering their poor quality, hard-to-sell assets that may lose value and liquidity in a financial crisis. It should be noted that no synthetic ETFs entered financial difficulties during the 2007-2009 banking crisis. Of course to avoid such counterparty risk, one can opt for physical ETFs such as this list of physical gold ETFs. [...]
Are you a gold bug? If not then this is the best time to become one. You see, gold prices are hovering around somewhere close to $1,000 per ounce after breaching the historical barrier of $1,200 per oounce a few months back. But soon they might breach the barriers like $2,000 per ounce or $3,000 per ounce or even $5,000 per ounce. Yeah, this is true, many experts are expecting this to happen in the coming months to years in this decade.
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