How the GOLD ETF fits into an ASX portfolio
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 could be used by investors to diversify a portfolio with the precious metal commodity of gold which is typically uncorrelated with other asset classes. In this way, GOLD could be used as a hedge against risk – gold has been traditionally used as a store of value and a hedge against inflation, and is often seen as a ‘safe haven’ asset.
GOLD meets our minimum level for FUM
The ETF Securities GOLD ETF had $2541.51 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.
What about management fees and costs?
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 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Next steps
Before buying any ETF based on what you read here on Best ETFs, check out our ETF Securities GOLD report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
So how can you actually invest in the GOLD ETF? In the month of September 2022, you can buy the GOLD ETF and get free brokerage with Pearler. All you have to do is buy and hold the ETF for 12 months! You can invest as little as $500. To buy GOLD for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
