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Best Gold ETFs for Q3 2022

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Gold is a popular asset among investors wishing to hedge against risks such as inflation, market turbulence, and political unrest. Aside from buying gold bullion directly, another way to gain exposure to gold is by investing in exchange-traded funds (ETFs) that hold gold as their underlying asset or invest in gold futures contracts.

Some investors view ETFs as a relatively liquid and low-cost option for investing in gold compared to alternatives such as gold futures or shares of gold-mining companies. Still, the price of gold can see big swings, meaning that ETFs that track it can also be volatile.

Key Takeaways

  • The price of gold has performed on par with the broader U.S. equity market over the past year.
  • The exchange-traded funds (ETFs) with the best one-year trailing total returns are GLDM, BAR, and SGOL.
  • The sole holding of each of these ETFs is gold bullion.

There are 10 exclusively gold-focused ETFs that trade in the U.S., excluding leveraged and inverse funds, as well as those with less than $50 million in assets under management (AUM). These funds invest directly in either gold bullion or gold futures contracts as opposed to companies that mine for the metal.

The price of gold, as measured by the benchmark S&P GSCI Gold Index, has risen 4.6% over the past year, in line with the S&P 500’s one-year total return of 4.7%, as of May 4, 2022. The best-performing gold ETF, based on performance over the past year, is the SPDR Gold MiniShares Trust (GLDM) fund.

We examine the three best gold ETFs below. All numbers are as of May 5, 2022.

  • Performance Over One Year: 5.0%
  • Expense Ratio: 0.18%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 3,683,414
  • Assets Under Management: $5.3 billion
  • Inception Date: June 25, 2018
  • Issuer: World Gold Council

GLDM aims to reflect the performance of the price of gold minus fund expenses. The ETF is structured as a grantor trust, which may provide investors with a certain degree of tax protection. Like BAR and SGOL on our list (see more below), GLDM also has a lower expense ratio than many other alternative gold commodity ETFs. GLDM tracks the London Bullion Market Association (LBMA) Gold Price as a benchmark. It provides a cost-effective and convenient way for investors to invest in gold. The sole holding of the fund is gold bullion.

  • Performance Over One Year: 5.0%
  • Expense Ratio: 0.17%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 685,111
  • Assets Under Management: $1.0 billion
  • Inception Date: Aug. 31, 2017
  • Issuer: GraniteShares

Like GLDM, BAR seeks to track the performance of the price of gold bullion minus fund expenses. It is also structured as a grantor trust, providing a certain degree of tax protection. The ETF is listed on NYSE Arca and can be traded through a normal brokerage account. It is a relatively inexpensive way to profit from potential increases in the price of gold compared to many other gold ETFs. The sole holding of the fund is gold bullion, which is stored in vaults in London.

  • Performance Over One Year: 4.9%
  • Expense Ratio: 0.17%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 2,941,068
  • Assets Under Management: $2.7 billion
  • Inception Date: Sept. 9, 2009
  • Issuer: Abrdn Plc

Like the two funds above, SGOL is structured as a grantor trust that seeks to track the performance of the price of gold bullion minus fund expenses. As mentioned, it also has lower expenses than many other gold ETFs. The sole holding of the fund is gold bullion, which is stored in vaults in London and Zurich. A leading physical commodity auditor, Inspectorate International, inspects SGOL’s vaults twice a year.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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