A Gold Etf

Gold etfs are passive investment instruments that are based on gold prices and invest in gold bullion.

A gold etf.

When it comes to investing in gold there are two main ways to do it buy physical gold or invest through an exchange traded fund etf although the etf route comes with an annual expense ratio. Etf issuers are ranked based on their aggregate 3 month fund flows of their etfs with exposure to gold. Below we ll look at the top 3 gold etfs as measured by 1 year trailing total returns. Gold etfs can be found in the following asset classes.

Because of its direct gold pricing there is a complete transparency on the holdings of an etf. With 28 etfs traded in the u s. A gold etf is a commodity exchange traded fund that can be used to hedge gold commodity risk or gain exposure to the fluctuations of gold itself. Markets gold etfs gather total assets under management of 140 45b.

A big contributor to its rise is the large inflows into gold exchange traded fund s gold etfs. Gold may have ended 2016 on a negative note but the yellow metal is now up 7 since january. 3 month fund flows is a metric that can be used to gauge the perceived popularity amongst investors of different etf issuers with etfs that have exposure to gold. All numbers are as of august 1.

Further due to its unique structure and creation mechanism the etfs have much lower expenses as compared to physical gold investments. An exchange traded fund etf is a fund which is designed to reflect the movement in price of an underlying asset or index or basket of stocks. Gold etfs are units representing physical gold which may be in paper or dematerialized form. Gold etfs have been created to track the price of gold or the inverse price of gold for times when the investor believes the gold price will fall or an index based on gold mining companies.

The average expense ratio is 0 59. If an investor has increased risk on his portfolio assets when the price of gold rises owning a gold etf can help reduce risk in that position.