Monday , 20 May 2024

5 Gold ETFs For Dip Buyers & Skittish Investors

Amid a strong U.S. dollar and investors’ appetite for domestic equities, 2018 has been unkind to gold and the related gold exchange traded funds (ETFs). There is some potentially good news for bullion and gold ETFs, however, [in that] bearish traders are starting to lose interest in the short gold trade. [In light of that] here are some gold ETFs for dip buyers and skittish investors to consider.

The original article has been edited here by for length (…) and clarity ([ ])

1. SPDR Long Dollar Gold Trust (GLDW)

…[This] gold ETF [is] right for this strong dollar environment…[It] targets the Solactive GLD Long USD Gold Index, a benchmark designed to a long position in physical gold and a short position…in the euro, Japanese yen, British pound sterling, Canadian dollar, Swedish krona and Swiss franc.

Sure, GLDW is down 1.66% year-to-date, but that is significantly less bad than the losses sported by traditional gold ETFs and that performance is indicative of the benefits of hedging gold when the dollar is strong.

Expense ratio: 0.50% per year, or $50 on a $10,000 investment.

2. SPDR Gold MiniShares Trust (GLDM)

This gold ETF debuted three months ago and…with GLDM being one of the least expensive gold ETFs on the market, it is reasonable to expect cost-conscious investors will gravitate to this product when gold bounces back.

Expense ratio: 0.18% per year, or $18 on a $10,000 investment.

3. VanEck Merk Gold Trust (OUNZ)

OUNZ’s primary objective is to provide investors with an opportunity to invest in gold through the shares and be able to take delivery of physical gold bullion (physical gold) in exchange for their shares. The Trust’s secondary objective is for the shares to reflect the performance of the price of gold less the expenses of the Trust’s operations…

Gold owned by OUNZ is the form of London bars, but Merk can convert those bars into gold coins and other gold bars in denominations required by investors.

Expense ratio: 0.40% per year, or $40 on a $10,000 investment

4. Sprott Gold Miners ETF (SGDM)

This gold ETF’s underlying index targets the 25 mining stocks with the highest beta (sensitivity) to spot gold prices with each stock’s weighting in the index adjusted based on its quarterly revenue growth on a year-over-year basis and the quality of its balance sheet, as measured by long-term debt to equity.

…[That being said, however,] when gold slumps, miners and the corresponding ETFs usually perform even worse…[and SGDM) has not been immune to that trend as highlighted by a year-to-date decline of more than 25%.

Expense ratio: 0.57% per year, or $57 on a $10,000 investment.

5. iShares Gold Strategy ETF (IAUF)

…This gold ETF, designed to be more tax efficient…[than] direct ownership of commodities, provides exposure to the price performance of gold and is designed to simplify tax filings as the fund does not require K-1 tax reporting…[It] features another gold ETF, the iShares Gold Trust (NYSEARCA:IAU), as one of its largest holdings. IAUF can also hold physical gold, gold futures and other derivatives.

Expense ratio: 0.25% per year, or $25 on a $10,000 investment.