The best gold ETF in the first quarter of 2022

Among investors who want to hedge against risks such as inflation, market turmoil and political turmoil, gold is a popular asset. In addition to buying gold bars directly, another way to gain exposure to gold is to invest in exchange-traded funds (ETFs) that use gold as the underlying asset or invest in gold futures contracts. Compared with alternatives such as gold futures or gold mining company stocks, some investors see ETFs as relatively liquid and low-cost options for investing in gold. Nevertheless, the price of gold may still fluctuate significantly, which means that ETFs that track the price of gold may also fluctuate.

Key points

  • In the past year, the price of gold has clearly underperformed the market.
  • The ETFs that track the best total returns in a year are GLDM, SGOL, and BAR.
  • The only holdings of these ETFs are gold bullion.

There are 10 ETFs that specifically target gold traded in the United States, excluding leveraged or inverse funds, and those with assets under management (AUM) of less than US$50 million. These funds either invest directly in gold bullion or in gold futures contracts rather than companies that mine metals. As of December 3, 2021, the 1-year tracking total return of the benchmark S&P GSCI Gold Index is -3.9%, which is far lower than the 25.6% 1-year total return of the S&P 500 Index. Based on the performance of the past year, the best performing gold ETF is SPDR Gold MiniShares Trust (GLDM). We have checked the three best gold ETFs below. All figures below are as of December 3, 2021.

  • Performance over one year: -3.3%
  • Expense rate: 0.18%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 2,683,370
  • Assets under management: US$4.2 billion
  • Date of Establishment: June 25, 2018
  • Issuer: World Gold Council

GLDM aims to reflect the performance of gold prices, minus fund fees. The structure of the ETF is a grantor trust, which can provide investors with a certain degree of tax protection. It provides investors with an economical and convenient way to invest in gold. GLDM is based on the London Bullion Market Association (LBMA) gold price. The only fund held by the fund is gold bullion.

  • Performance over one year: -3.3%
  • Expense rate: 0.17%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 1,033,084
  • Assets under management: US$2.3 billion
  • Date of establishment: September 9, 2009
  • Publisher: Abrdn PLC

SGOL has also been constructed as a grantor trust to track the performance of gold bullion prices, minus fund fees. Like GLDM, its price is lower than many other gold ETFs. The only holdings of the fund are gold bars, which are stored in vaults in London and Zurich. Inspectorate International, a leading physical and physical commodity auditor, inspects SGOL’s vault twice a year.

  • Performance over one year: -3.3%
  • Expense rate: 0.17%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 621,138
  • Assets under management: US$872.2 million
  • Date of Establishment: August 31, 2017
  • Publisher: GraniteShares

Like the aforementioned funds, BAR seeks to track the performance of gold bullion prices, minus fund fees. The ETF is also structured as a grantor trust. BAR is listed on the New York Stock Exchange Arca and can be traded through ordinary brokerage accounts. Like the aforementioned funds, BAR’s expense ratio is lower than many other alternative gold commodity ETFs. The only fund held by the fund is gold bullion, which is kept in a vault in London.

The comments, opinions and analysis expressed here are for reference only and should not be regarded as personal investment advice or advice on investing in any securities or adopting any investment strategy. Although we believe that the information provided here is reliable, we do not guarantee its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Due to the rapidly changing market and economic conditions, all comments, opinions and analyses contained in our content are presented on the date of publication and may change without notice. This material is not intended to provide a complete analysis of every important fact about any country, region, market, industry, investment or strategy.

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