Getting exposure to the Commodities sector has never been easier thanks to ASX ETFs like the ETF Securities Physical Gold ETF (ASX: GOLD). That said, no matter how easy it seems to be, we think it’s still important to do your own ETF review.
How the GOLD ETF could be used in portfolios
The ETFS GOLD ETF provides investors with access to the precious metal of gold, by seeking to achieve a return equivalent to the movements in the gold spot price, before fees and expenses.
GOLD exceeds our minimum market cap (FUM) criteria
The ETF Securities GOLD ETF had $2040.75 million of money invested when we last pulled the monthly numbers. Given GOLD’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the Commodities sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
GOLD’s fees & costs explained
ETF Securities charges investors a yearly management fee of 0.40% for the GOLD ETF. This means that if you invested $2,000 in GOLD for a full year, you could expect to pay management fees of around $8.00.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Bottom line
This is just a quick overview of the GOLD ETF. Before ‘testing the depth of water with both feet’ so to speak, be sure to read the GOLD ETF’s Product Disclosure Statement (PDS), available on the ETF Securities website, or speak to your financial adviser. For another handy resource, take a look at our ETF Securities GOLD report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
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