Investing is something you need to do if you want to get the most out of your savings. Saving it in the bank is okay, but do not expect to get good returns if you do the investment this way. If you are somehow a risk taker, considering ETFs is a good idea. Although not everyone agrees, this investment can definitely go a long way and can yield good returns, especially if you are familiar with trading.
One of the things people look closely into when investing in ETFs is gold. Why not? Gold is not only in demand but the value of it increases and is not affected by the economic crisis.
The good news is, there are so many ways you can invest in gold. You can decide on buying physical gold, may it be coins, jewelry or bars. But if you want it easier, more convenient and safer, it is best if you just buy shares from gold mining companies or gold focused ETF.
If you are unsure on which of the gold ETFs to invest, here are some of the things to consider when looking for one:
– Large size
Go for an ETF that is managing at the least two hundred million dollars of assets. The bigger the size they manage, the less chances it will fall prey in the market fiasco.
– Reasonable expense/fees ratio
It would be ideal if you look for ETFs that have less than 1% expense ratio. If the expense ratio goes over 1.5%, it is already considered excessive.
– Non-leveraged ETFs
This is more recommended than its counterpart, leveraged ETF. The latter uses derivatives like futures and options contracts so its returns will get magnified, unfortunately, this can carry a lot higher risk.
Moving on, now that you are ready with gold investment, the next thing you need to think about is which of the many gold ETFs to invest in.
Sure, you have to start considering Gold ETFs that are most popular. To give you a good start, read below:
SPDR Gold Shares
The most liquid and biggest gold ETF as of date is SPDR. This is the standard used by investors if they want to know the current price of this yellow metal. The sole asset of this ETF is gold bullion. Their gold bullion is kept in vaults that are secured and safe.
Investors who want to invest in this gold ETF should pay a specified premium. What made this a popular option is they have a larger expense ratio, particularly if you compare them with their counterparts.
iShares Gold Trust
This is almost the same as the SPDR. It also has a larger expense ratio if you compare it with their huge rivals.
Buying an ETF is actually a great alternative to owning physical gold, only that the ETF does not give investors the expense and the hassle of insuring physical coins and bars.
There are other options like VanEck Vectors Gold Miners ETF, VanEck Vectors Junior Gold Miners ETF and SPDR Gold MiniShares Trust. To know which of them to trust, it is best if you research and find what suits your priorities and financial goals more.