Gold is a popular investment for those looking to hedge against stock market uncertainty and inflation. In 2024, investors have been flocking to gold with gusto — in fact, gold’s price hit an all-time high July 17, trading at $2,483 per ounce.
As gold values rise, some investors may be interested in gold exchange-traded funds rather than purchasing bullion itself. Below is our complete list of best-performing gold ETFs. We exclude gold exchange-traded notes and leveraged gold ETFs.
Best-performing gold ETFs
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SPDR Gold MiniShares Trust |
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Franklin Responsibly Sourced Gold ETF |
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Goldman Sachs Physical Gold ETF |
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Source: VettaFi. Data is current as of market close on Aug. 1, 2024, and is for informational purposes only. |
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What are gold ETFs?
Gold ETFs are exchange-traded funds that give investors exposure to gold without having to directly purchase, store and resell the precious metal. Some gold ETFs track the price of gold, while others invest in companies in the gold-mining industry.
As with other types of ETFs, the issuing company buys stock in gold-related companies or purchases and stores gold bullion itself. Investors buy shares in the fund, whose value rises and falls with the underlying gold price or company stock value.
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How to invest in gold ETFs
Here’s how to buy shares in a gold ETF:
Step 1: Find a gold ETF
Step 2: Analyze the ETF
It’s important to research ETFs before buying, just as you’d research stocks. Two things to check before purchasing shares in a gold ETF:
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Five-year returns. Most (but not all) gold ETFs are pegged to spot gold price, so returns should align with gold price moves.
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Expense ratio. This is the ETF’s annual fee, paid out of your investment in the fund. Look for a low one.
And two important notes: The average investor may want to exercise caution around buying leveraged gold ETFs — these use financial derivatives and borrowed money to make bets on future price movements. Another asset to be cautious about is gold exchange-traded notes. ETNs are secured debt obligations that don’t actually own the underlying gold (unlike ETFs) and have a greater risk of credit default.
These investments are more for professional investors and generally not suitable for the buy-and-hold strategy favored by many retirement investors.
Step 3: Buy the gold ETF
You can buy ETFs through an online broker just like you’d buy a stock. One approach is to buy them regularly to take advantage of dollar-cost averaging.
Learn more about sector ETFs:
Neither the author nor editor held positions in the aforementioned investments at the time of publication.
