Gold ETF Guide
Probably the thing we get asked about most here at Gold Prices Today Live is what, exactly these gold ETF investments are. So we thought that a smart guide to gold ETFs might be in order.
Gold is always a sound investment, no matter the economic climate, and in times of uncertainty, it’s the go-to for most wise investors. An ETF is an Exchange Traded Fund which works in a way similar to money market funds, but allows multiple trades during the day, rather than just one or two. Many ETFs are based on commodities like bullion.
A gold ETF is essentially a certificate based on a specific amount of gold. So one certificate in an ETF might represent half an ounce of gold at current value. As gold’s value versus the US Dollar increases, so does the value (in dollars) of the certificate. These can be traded throughout the day like most other stocks, but are exchanged as part of an ETF, so you are always guaranteed a sale or purchase – which is based on the current market value of gold, or gold’s “spot price.”
Different types of funds give different types of ETF investing in gold as well. The SPDR Gold Trust, for instance, is a gold ETF based on gold bullion, located in the U.S., and with a relatively high expense ratio of 0.4%. The PowerShares DB Gold Fund, on the other hand, is based on gold futures (rather than physical gold) and has an even higher expense ratio of 0.5%.
If you have small holdings, then going with one ETF and aiming for lower costs is probably most important to you. If you have a very large amount of holdings, diversifying between custodians rather than minimizing costs may be your goal.
In either case, gold ETFs change daily and even hourly and are a good way to get into gold investing if you don’t want to hold a lot of physical gold yourself.
Tags: ETF gold guide, gold etf, gold ETF guide, guide to gold ETFs
eShop: ETF gold guide gold etf gold ETF guide guide to gold ETFs
Leave a Reply
You must be logged in to post a comment.
