Wednesday, June 8, 2011

Best Gold ETF in US

There are different types of Gold ETFs in US and Gold ETF backed by physical Gold is just one of the types of Gold ETF in US. This article compares some of the Gold ETFs backed by physical Gold and comes up with the best.

List of the Gold ETFs for comparison:
  1. SPDR Gold Trust: SPDR Gold Shares is marketed by State Street Global Markets LLC and is listed in NYSE (USA), TYO (Japan) and SGX (Singapore). This ETF was launched in 2004. The gold is held in the form of allocated 400-ounce London Good Delivery bars in the London vault of HSBC (HBC) Bank USA, or in the vaults of subcustodians. They are approved by London Bullion Market Association (LMBA) of good delivery standards.
  2. ETFS Physical Swiss Gold Shares: ETF Securities or ”Gold Bullion Securities” is listed in lot of countries including Australia, Belgium, France, Germany, Italy, Netherlands and United Kingdom. This ETF was launched in 2009 and gold bullion is held in Zurich, Switzerland. They are also approved by LMBA of good delivery standards.
  3. iShares COMEX Gold Trust: iShares Gold Trust was launched by iShares and is listed on the NYSE (USA) and TSX (Canada). This ETF was launched in 2005. The gold is held by the custodian in the vicinity of New York, Toronto, Montreal and London and also meets the same LMBA standards as the above two.
As discussed in previous article, the price for these ETFs are pretty close to the physical Gold. The differentiating factor for investors is the liquidity and operational costs.

From volume perspective, here are the rankings (highest volume gets ranked 1st):
  1. SPDR Gold Trust
  2. iShares COMEX Gold Trust
  3. ETFS Physical Swiss Gold Shares
SPDR Gold Trust leads the way by a huge margin and has almost 5 times more volume than the nearest competitor. So, SPDR Gold Trust is highly liquid ETF. Also, this fund has the highest market capitalization amongs Gold ETFs in the market.

From operational costs perspective, here are the rankings (lowest costs gets ranked 1st):
  1. ETFS Physical Swiss Gold Shares
  2. SPDR Gold Trust and iShares COMEX Gold Trust
ETFS Physical Swiss Gold Shares has the lowest expense of 0.39%. The other two funds tie at the second place with expense of 0.4%. So, the investors who are frequently trading physically backed gold ETFs may find ETFS Physical Swiss Gold Shares small difference in management fees to be the deciding factor. Investors who are comfortable with only the biggest funds might choose SPDR Gold Trust instead.
Overall, the best Gold ETF in US is SPDR Gold Trust with high liquidity and relatively low expenses.

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  1. I think among all investment options, PPF is one of the best. Because in PPF the money is secured and also gives a return of 8% pa, only disadvantage is long term. I have come across a article on PPF. Sharing the link with you. Hope this will give you another opportunity to invest.

  2. Thanks for adding your valuable information here. Really nice of you. Keep in touch and have a nice day ahead.