Summary: Adding precious metals such as gold to your investment portfolio is a terrific way to diversify and create a hedge against inflation. One way to do that is to purchase gold exchange-traded funds (ETFs). In this guide, you will learn how to invest in Gold ETFs through an online commodity trading platform such as eToro.
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What are gold ETFs?
Gold ETFs are financial instruments that represent ownership in physical gold or track the performance of gold on the market. In other words, you can invest in gold ETFs on various stock exchanges without actually owning and managing physical gold, which removes the storage and security concerns associated with owning physical gold.
Some of the best gold ETFs to consider checking out in 2023 include:
- iShares Gold Trust Micro ETF (NASDAQ: IAUM);
- VanEck Vectors Junior Gold Miners ETF (NASDAQ: GDXJ);
- SPDR Gold Shares ETF (NYSE: GLD).
Note
Highly Rated Stock Trading & Investing Platform
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
1. iShares Gold Trust Micro ETF (IAUM)
Asset value as of December 2023: ~$960 million
Expense ratio as of December 2023: <0.01%
Holdings: Bullion
The iShares Gold Trust is one of the leading gold exchange-traded funds built around physical gold bullion securely stored in vaults. Featuring assets totaling almost a billion, IAU boasts solid liquidity, and with competitive prices, it represents an affordable entry into the commodities market for new investors.
iShares Gold Trust Micro price today
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2. VanEck Vectors Junior Gold Miners ETF (GDXJ)
Asset value as of December 2023: ~$384 million
Expense ratio as of December 2023: 0.55%
Holdings: Gold mining company securities
VanEck Vectors Junior Gold Miners is an ETF designed to closely mirror the performance of the Market Vectors Global Junior Gold Miners Index (MVGDXJTR). Comprising around 90 gold mining stocks, this ETF features companies that either generate or have the potential to generate a minimum of 50% of their revenues from gold and/or silver mining, royalties, and/or streaming.
VanEck Vectors Junior Gold Miners price today
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3. SPDR Gold Shares ETF (GLD)
Asset value as of December 2023: ~$58 billion
Expense ratio as of December 2023: 0.40%
Holdings: Bullion
SPDR Gold Shares is the largest gold ETF, boasting over $58 billion in assets under management and enjoying high liquidity. The ETF is backed by physical bullion, closely mirroring the fluctuations in the gold spot price. Despite its size, SPDR presents a cost-effective and convenient avenue for investors to participate in the gold market.
SPDR Gold Shares price today
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How to invest in gold ETFs: Step-by-step
To invest in gold ETFs, you can take the following steps:
- Step 1: Choose a broker and fund your account;
- Step 2: Research gold ETFs;
- Step 3: Place your order;
- Step 4: Monitor your investment.
Step 1: Choose a broker and fund your account
The first step involved finding a suitable broker and registering an account.
Our go-to platform for gold ETF trading is eToro, a notable brokerage with millions of active users and features such as:
- Commission-free stock trading;
- Access to global stock exchanges;
- Charting patterns;
- Fractional shares;
- Copy-trading and Smart Portfolios.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
Once you’ve made your account, you can deposit some funds into it. Usually, you can fund your account via bank transfers, credit cards, or alternative payment options, such as PayPal.
Step 2: Research gold ETFs
Once you have funded your account, it is time to do comprehensive research and figure out what gold ETFs suit your investment strategy the best. Consider your investment objectives, risk tolerance, and time horizon, as well as the current and historical performance of the funds that grab your attention. Additionally, consider critical factors such as expense ratios, historical performance, and the ETF’s tracking index.
Step 3: Place an order
Finally, you can place an order and add some gold ETFs to your portfolio. To do that, you can:
- Log into your brokerage account;
- Search for the ETFs you wish to buy;
- Specify the amount you wish to invest;
- Review your order;
- Confirm and execute the order.
Step 4: Monitor your investment
Monitoring your portfolio is crucial. Begin by establishing clear investment objectives, choosing key performance metrics, and determining the frequency of your portfolio reviews. Moreover, try to use portfolio tracking tools provided by your brokerage to regularly assess metrics such as total portfolio value, rate of return, and individual asset performance.
Also, try to evaluate other investments within your portfolio, considering factors like earnings reports and market trends, and stay informed about broader economic indicators and global events that may impact your investments. Naturally, you should also try to diversify your portfolio as much as possible. To do so with additional commodity ETFs, check out our other guides on:
- How to Invest in Copper ETFs;
- How to Invest in Silver ETFs;
- How to Invest in Lithium ETFs;
- How to Invest in Natural Gas ETFs;
- How to Invest in Wheat ETFs;
- How to Invest in Cobalt ETFs;
- How to Invest in Farmland ETFs.
Pros and cons of investing in gold ETFs
Pros
- Diversification: Precious metals are a good way to diversify your portfolio;
- Hedge against inflation: Gold tends to retain itself value in times of economic turbulence;
- Liquidity: ETFs are highly liquid;
- Cost-effective: ETFs are more affordable than physical gold.
Cons
- Tracking: Some ETFs may not track their assets accurately;
- Limited control: You won’t own physical gold
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about gold ETFs
How do gold ETFs work?
Gold ETFs are financial instruments traded on stock exchanges. They track the price of gold or companies that mine it and allow investors to profit from gold price movements without actually owning physical gold.
What are the best gold ETFs?
Some of the best gold ETFs to consider checking out in 2023 include iShares Gold Trust Micro ETF (NASDAQ: IAUM), VanEck Vectors Junior Gold Miners ETF (NASDAQ: GDXJ), and SPDR Gold Shares ETF (NYSE: GLD).
How to invest in gold ETFs?
To trade gold ETFs, you can open an account with a reputable trading platform such as eToro.
Where to trade gold ETFs?
You can trade ETFs on trading platforms such as eToro.
How are gold ETFs taxed?
Gold ETFs can be taxed differently based on the tax laws and regulations in your region. Often, they are taxed as capital gains.
Why invest in ETFs instead of actual gold?
Some of the key advantages of gold ETFs include liquidity, affordability, and diversification potential.
Do Gold ETFs pay dividends?
Unlike stocks, ETFs usually do not pay regular dividends.
