5 Best Gold ETFs For Investing in Gold

Investing in gold has long been considered a safe haven for investors seeking to hedge against economic uncertainty and market volatility. With the rise of Exchange-Traded Funds (ETFs), gaining exposure to this precious metal has become more accessible and convenient for investors of all levels. Gold ETFs offer the advantage of owning gold without the hassle of physical storage, making them an attractive option for those looking to diversify their portfolios.

In this article, we will explore some of the best gold ETFs currently available in the market. These ETFs have demonstrated strong performance and offer investors various options to capitalize on the potential benefits of gold investment. From leveraged funds to physically backed ETFs, there are several options to suit different investment strategies and risk appetites.

Top 5 gold ETFs based on their Five-year returns

These top 5 gold ETFs are ranked based on their Five-year returns and Expense Ratio, providing investors with key information to consider when evaluating gold ETF investment options.

Top 5 gold ETFs based on Total Assets ($MM)

Top 5 Gold ETFs based on Performance :

The ranking of these five ETFs is based on a combination of factors, including:

Expense Ratio: Lower expense ratios are generally favourable for investors as they result in lower costs, which can potentially lead to higher returns over time.

Performance: YTD performance and historical returns over 1, 3, and 5 years provide insights into how well the ETF has performed relative to its peers and benchmark index.

Expenses Rating: When available, the expenses rating offers an additional measure of the fund’s efficiency in managing costs relative to its peers.

DGP (DB Gold Double Long Exchange Traded Notes):

• Symbol: DGP
• ETF Name: DB Gold Double Long Exchange Traded Notes
• Total Assets ($MM): $87.45
• YTD: 13.89%
• 1 Year Return: 18.24%
• 3 Year Return: 10.96%
• 5 Year Return: 15.82%
• Expense Ratio: 0.75%
• Expenses Rating: A-

Note: DGP offers leveraged exposure to gold, seeking to provide double the daily performance of gold bullion. With a solid A- rating and a competitive expense ratio of 0.75%, DGP is suitable for investors seeking amplified exposure to gold price movements.

UGL (ProShares Ultra Gold):

• Symbol: UGL
• ETF Name: Pro Shares Ultra Gold
• Total Assets ($MM): $204.74
• YTD: 13.14%
• 1 Year Return: 15.49%
• 3 Year Return: 9.20%
• 5 Year Return: 13.56%
• Expense Ratio: 0.95%
• Expenses Rating: N/A

Note: UGL seeks to deliver twice the daily performance of gold bullion. While its expense rating is not available (N/A), UGL has maintained a strong performance track record and is favoured by investors looking for leveraged exposure to gold.

SGOL (abrdn Physical Gold Shares ETF):

• Symbol: SGOL
• ETF Name: abrdn Physical Gold Shares ETF
• Total Assets ($MM): $2,894.26
• YTD: 7.60%
• 1 Year Return: 12.92%
• 3 Year Return: 8.50%
• 5 Year Return: 10.97%
• Expense Ratio: 0.17%
• Expenses Rating: A+

Note: SGOL is backed by physical gold held in secure vaults, providing investors with direct exposure to the precious metal. With an outstanding A+ rating and a low expense ratio of 0.17%, SGOL is a top choice for investors seeking a safe haven asset with minimal costs.

GLDM (SPDR Gold Mini Shares Trust):

• Symbol: GLDM
• ETF Name: SPDR Gold Mini Shares Trust
• Total Assets ($MM): $6,919.36
• YTD: 7.68%
• 1 Year Return: 13.06%
• 3 Year Return: 8.51%
• 5 Year Return: 10.98%
• Expense Ratio: 0.10%
• Expenses Rating: A

Note: GLDM offers exposure to physical gold in a smaller, more accessible format compared to larger gold ETFs. With a solid A rating and an ultra-low expense ratio of 0.10%, GLDM is an attractive option for investors seeking efficient gold exposure.

IAU (iShares Gold Trust):

• Symbol: IAU
• ETF Name: iShares Gold Trust
• Total Assets ($MM): $27,285.20
• YTD: 7.64%
• 1 Year Return: 12.81%
• 3 Year Return: 8.38%
• 5 Year Return: 10.87%
• Expense Ratio: 0.25%
• Expenses Rating: N/A

Note: IAU provides investors with exposure to physical gold held in vaults. While its expense rating is not available (N/A), IAU has maintained strong performance and is favoured by investors seeking a straightforward and cost-effective way to invest in gold.

How to Select Top Gold ETFs:

U.S. Funds Listed in c’s Screener for Gold or Materials ETFs:

ETF.com provides a comprehensive screener tool that allows investors to filter ETFs based on various criteria, including asset class and sector. For our selection, we focus on gold or materials ETFs listed in the U.S., as these are pertinent to our objective of investing in gold.

Assets Under Management (AUM) of at Least $800 Million:

AUM refers to the total market value of assets managed by a fund. Opting for funds with higher AUM levels typically indicates investor confidence and suggests the fund’s liquidity and stability. By setting a minimum AUM threshold of $800 million, we aim to ensure that selected ETFs have sufficient scale and investor interest._[1]

Expense Ratios Under 0.60 Percent:

Expense ratio represents the annual fee charged by the fund to cover operating expenses. Lower expense ratios translate to lower costs for investors and can contribute to higher returns over time. By selecting ETFs with expense ratios under 0.60 percent, we prioritize cost-efficient options that offer competitive pricing within the industry.

How to buy Gold ETFs:

Step #1-Locate a Gold ETF: Search for gold ETFs on your broker’s platform. If you don’t have a broker yet, consider opening a brokerage account.

Step #2 -Evaluate the ETF: Before investing, consider two key factors:

• Five-year returns: Ensure the ETF’s performance aligns with movements in the price of gold, as most gold ETFs track the spot gold price.
• Expense ratio: This annual fee is deducted from your investment. Aim for a low expense ratio, as the average for gold ETFs is around 0.65%, according to ETF.com.

Caution: Avoid leveraged gold ETFs and gold exchange-traded notes (ETNs), which carry higher risk and are more suitable for experienced investors rather than those pursuing a long-term, buy-and-hold strategy for retirement savings.

Step #3 -Purchase the Gold ETF: Buying ETF shares is similar to buying stocks, and can be done through an online broker. Consider regular purchases to benefit from dollar-cost averaging.

Bottom Line:

Investing in gold ETFs offers a straightforward way to gain exposure to the precious metal without the complexities of physical ownership. By following a few simple steps, investors can access the potential benefits of gold as a hedge against market volatility and inflation.

Remember to conduct thorough research, analyse key factors such as historical performance and expense ratios, and exercise caution when considering leveraged or complex gold ETF products. With careful consideration and a long-term investment approach, gold ETFs can be a valuable addition to a diversified investment portfolio.