Understanding The Gold ETF

Gold ETF s were a much-anticipated development for investors and have gained considerable popularity. Industry analysts have long stated that in the past traditional gold investment had proved difficult for a variety of reasons i.e. secured storage, insurance requirements, transport and high mark ups.

The major advantage of gold exchange traded fund is that both small and larger investors can purchase ‘shares’ through a stock broker without being concerned about the problems mentioned above.

What Is A Gold Exchange Traded Fund?

Typically a gold etf is an Exchange Traded Fund Unit that represents the value of 1/10th of an ounce of gold. This allows investment in gold in small denominations for smaller retail investors. A gold exchange traded fund is a much simpler alternative for most investors, since these funds provide quick and easy access to the gold market.

History Of Gold Exchange Traded Funds

The first proposal of a gold exchange traded fund was originated by an Indian company called Benchmark Asset Management, a proposal was launched with the SEBI (Securities Exchange Board Of India) in 2002. This proposal was not approved at that time.

The Australia Stock Exchange was the first to launch a gold exchange traded fund in 2003 by Gold Bullion Securities under the symbol ‘GOLD’ . This fund was fully backed, insured and deposited by gold bullion.

The Most Popular Gold Exchange Traded Funds

GLD:
One of the longest standing, launched in May of 2004. Said to have over $10 billion dollars in asset and an expense ratio of less than .5%.

IAU:
Launched in January of 2005, said to of accumulated over $1 billion in assets and a expense ration of less than half a percent. It is said this etf holds 700,000 ounces of gold in trust.

Etf’s are traded on major stock exchanges such as New York, London and Paris. You’ll find a standard fee of 0.40% is charged.

Conclusion: Ways To Buy Gold

There are several ways you can get involved in the gold market.

You can purchase gold stocks of companies involved in mining or production of gold.
You can purchase a gold mutual fund that features exposure to the metal itself.
You can purchase actual gold bullion and hold it in your possession.
Last but not least you can purchase shares of a gold exchange traded fund which appears to be the most popular trend in gold investment today.

Although a gold etf does nothing more than hold gold bullion, an increasing number of people seem to prefer them to holding the yellow metal itself.

We Buy Gold, Platinum And Silver In Any Condition Canada Wide.

If you’re thinking of selling your unwanted gold, platinum or silver remember we buy gold and precious metals Canada wide including:

Ontario On, British Columbia BC, Alberta AB, Saskatchewan SK, Manitoba MB, Quebec QC, Nova Scotia NS, New Brunswick NB, Newfoundland and Labrador NL, Prince Edward Island PEI, Yukon YT, Nunavut and the North West Territories NT

| Return to Resource page from Gold ETF page |