Ranglister
5 Best Gold ETFs to Invest In
Gold Hitting New All-Time-Highs
Since the end of the convertibility of gold into US dollar (USD) in 1971, there have been two gold bull markets in the 1970s and 2000s. And we might be in the midst of a new one, especially with the very strong run in gold in 2024.
Source: Trading Economics
A major driver of each gold run has been concerns about the economy and the persistence of the dominance of the USD over the global financial system.
This is what is driving the current gold bull market again, with the US government piling up debt like never before. And with rising interest rates in parallel, this has caused the interest payment to go above the 1 trillion USD mark for the very first time.
Source: Federal Reserve Bank of St Louis
For reference, this is larger than the US defense budget, itself 40% of the global military spending.
The new Trump administration, including the now very influential Elon Musk, has expressed concerns about this situation.
“We do have an opportunity to do kind of a once-in-a-lifetime deregulation and reduction in the size of government. Because the other thing besides the regulations, America is also going bankrupt extremely quickly, and… everyone seems to be sort of whistling past the graveyard on this one.” – Elon Musk
As gold has historically been a reserve currency without counterparty risk, it is often seen as a safe haven in times of financial uncertainty.
An excellent way to gain exposure to gold is to invest in gold miners, as this is equivalent to buying not only the current production but also the mineral reserves still in the ground.
Why to Invest In Gold ETFs
Gold mining has excited imagination and public greed since the dawn of civilization, as illustrated by expressions like gold rush, gold fever, golden opportunity, fool’s gold, etc.
However, gold is very rare on Earth, and even the best gold deposit usually contains as little as a few grams of gold per ton of rock mined. Combined with possible interference by local government and complex geology, investing in gold miners is as risky as it can be profitable. For example, in November 2024, executives at the gold miner Resolute Mining were detained by the Mali government over a tax dispute, sending the company stock into a tailspin.
By offering an easy-to-invest financial instrument that provides exposure to dozens of gold miners at once, gold ETFs can help diversify this risk.
Gold Focused Exchange Traded Funds (ETFs)
*Note: Metrics are provided in USD and were accurate at the time of writing.*
1. SPDR Gold Trust
By far the largest gold ETF, SPDR differs from others as it does not hold stock but actual gold. The trust owns 877 tons of gold or as much gold reserve as major countries like India or Japan.
Source: World Gold Council
With a value of $75B, it is by far the most liquid gold ETF Trust, with very little difference between the price paid by an investor in GLD and gold spot price. This can actually be a lower premium than actual physical gold an investor can take delivery of in physical form, like gold bars or gold coins.
The ETF’s size also means that it can afford very low management fees, with an expense ratio of only 0.40%.
So this is the closest investors can do to directly own gold without taking physical delivery. However, it does not provide any yield, as it is not an investment in productive companies’ stocks. It also does not provide any leverage against gold prices.
2. VanEck Gold Miners ETF
This is one of the largest gold ETFs focused on gold miners, with $14.3B of assets under management. It has a low net expense ratio of only 0.51%.
