2 ASX Gold ETFs For 2019 & Beyond

Two of the most popular ASX gold ETFs are the ETFS Physical Gold (ASX: GOLD) ETF and BetaShares Global Gold Miners (ASX: MNRS) ETF.

View now: full list of Australian ASX ETFs.

Why Would Anyone Invest In Gold?

Gold is seen as a “safe haven” for your money. Investors view it as a relatively stable asset that retains its value even when markets or real estate are falling. Gold tends to receive a lot more interest when markets are falling or there are fears of a recession.

There are many different ways to invest in gold, the most difficult of which would be to actually buy physical gold from a mint and keep it under your bed – or probably in a safe – for a rainy day. Unfortunately, holding costs and logistics can make this strategy difficult, and there are easier options.

Key Differences: GOLD v MNRS

The ETFS Physical Gold ETF (ASX: GOLD) is designed to make life easy, allowing investors to gain exposure to physical gold via an ETF which can be bought and sold like shares. The GOLD ETF by ETF Securities is backed by physical gold held by HSBC Bank Plc and only metal which conforms with the London Bullion Market Association’s rules are accepted.

The GOLD ETF gives you direct exposure to the underlying asset (gold bars) and returns depend entirely on the price of gold. Over the last 10 years, the GOLD ETF has returned 6.17% per year and 7.62% over the last three years.

The BetaShares Global Gold Miners ETF (ASX: MNRS) takes a different approach to getting exposure to the performance of gold prices. MNRS invests in shares of the largest gold miners around the world. This is more indirect exposure to gold, and performance is affected by the price of gold, the performance of the companies and investor sentiment towards the shares.

The MNRS ETF hold shares in companies based around the world, but a large majority are in Canada, South Africa and the US. The MNRS ETF is also currency-hedged, meaning all foreign currency exposure is hedged to the Australian dollar.

Over the last three years, the fund has returned 4.64% per year, so it has underperformed the GOLD ETF, however, there is potential for huge returns, with MNRS returning 69.89% over the last 12 months.

The Fees & Costs GOLD & MNRS

The GOLD ETF has a management fee of 0.4% per year, while the MNRS ETF has a 0.57% per year management fee which is likely higher because of currency hedging.

The physical GOLD ETF would probably be considered less risky because it is a much larger ETF and is backed by physical gold. The gold miner MNRS ETF, on the other hand, is much more volatile as there are several different factors influencing the price.

To me, it would suggest that GOLD would be a better choice for a stable investment or a hedge for an existing portfolio, while the MNRS ETF has the potential for higher returns (and bigger losses).

What I Think

Gold investments can have a place in most balanced portfolios, but I consider it to be more of a hedging play than an investment for long-term growth. For that reason, I would lean more towards the physical gold ETF, but that’s just a personal preference. If you’re looking to invest in gold, it’s important to think about what the purpose of the investment is. To view more gold and commodity ETFs click here.

For our number one ETF pick, have a look at the free report below.

[ls_content_block id=”695″ para=”paragraphs”]

Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report, and 24/7 access to the Rask community, for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.