The price of gold has pulled back some, but continues to hover about 5% below its all-time high. Overall, gold prices have strengthened this year thanks to worries about a potential global economic recession, uncertainty over inflation and the direction of interest rates. This has led investors to start looking for the best gold ETFs for exposure to the precious metal.
Gold continues to serve as a safe haven for investors in times of trouble and market volatility. With several question marks hanging over stocks and other asset classes, gold has risen since the start of the year. Many analysts expect further gains in the months ahead, with some forecasting that gold will be at a new record high by year’s end. As its price trends upwards, let’s look at three top gold ETFs to buy.
Graniteshares Gold Trust (BAR)
The Graniteshares Gold Trust ETF (NYSEARCA:BAR) has two distinguishing characteristics. First, BAR ranks among the lowest cost gold ETFs on the market. Second, physical gold backs the fund. The trust audits its vault twice each year, it cannot lend any gold and cannot hold any derivatives. These parameters make the Graniteshares Gold Trust a very safe investment vehicle.
The trust proclaims that holding shares in BAR is the best option for investors who want to own gold but don’t want the trouble and expense of buying, storing and insuring actual gold bars. The fee to own shares in the trust is 0.18%, which is comparatively low. The trust currently holds $975 million worth of physical gold, and has earned a return of 8% over the last five years. The ETF also recently hit a 52-week high. For investors wanting exposure to physical gold, the Graniteshares Gold Trust ETF is a very good option.
SPDR Gold Shares (GLD)
The SPDR Gold Shares ETF (NYSEARCA:GLD) claims to be the largest physically backed gold ETF in the world. The fund currently holds $59 billion worth of gold bullion. The expense ratio is a little higher at 0.40%, and the return is similar to BAR at 8%. However, this ETF may appeal to investors who want exposure to a larger fund with bigger gold holdings.
The GLD ETF tracks the price of gold measured in U.S. dollars and keeps its physical gold holdings in London, England under the custody of a major British bank. Like other gold ETFs, SPDR Gold Shares has recently been trading near a 52-week high as the price of the precious metal has moved closer to its all-time high.
iShares Gold Trust Micro ETF (IAUM)
For an ultra low-cost gold ETF, look to the iShares Gold Trust Micro fund (NYSEARCA:IAUM). This ETF has an extremely low expense ratio of 0.09%. IAUM claims it is “the lowest cost physical gold ETF currently on the market.” iShares offers exposure to the daily price changes in gold bullion and holds $982 million of physical gold to support the fund. Year-to-date, the iShares Gold Trust Micro ETF is up about 7%, mirroring the rise in gold’s price.
If there’s one drawback with this ETF it is that it hasn’t been around for very long. The IAUM ETF has only been in existence since 2021. As such, there is no long-term track record to view regarding the fund’s performance. However, given that it tracks the spot price of gold, this ETF can be expected to perform much the same as similar funds. The real advantage to investors is in the low fees charged, which can leave a lot of money in your pocket.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
