Gold ETFs are a great way to earn passive income. They let you invest in gold without having to buy and store the metal. In this article, we will look at the top 5 gold ETFs for 2024. These ETFs can help you grow your money while keeping your investments safe.
Key Takeaways
- SPDR Gold Shares (GLD) is one of the most popular gold ETFs. It tracks the price of gold and is easy to trade.
- iShares Gold Trust (IAU) offers a low-cost way to invest in gold. It also tracks the price of gold closely.
- VanEck Gold Miners ETF (GDX) invests in companies that mine for gold. This ETF can be more volatile but offers high growth potential.
- VanEck Junior Gold Miners ETF (GDXJ) focuses on smaller gold mining companies. It is riskier but can offer big rewards.
- GraniteShares Gold Trust (BAR) is another low-cost option. It holds physical gold and tracks its price closely.
SPDR Gold Shares (GLD)
SPDR Gold Shares (GLD) is one of the most popular gold ETFs available. The fund invests in physical gold, and its performance is highly correlated to gold spot prices. GLD has soared 26% over the past 12 months, compared to five- and 10-year annualized returns of 9.7% and 6%, respectively. For comparison, the SPDR S&P 500 ETF has not performed as well.
Key Metrics
| Metric | Value |
|---|---|
| 2024 YTD Performance | 19.4% |
| Five-Year Annual Return | 10.1% |
| Expense Ratio | 0.40% |
Why Choose GLD?
- Highly Liquid: GLD is one of the most liquid gold ETFs, making it easy to buy and sell shares.
- Low Cost: With an expense ratio of just 0.40%, it’s a cost-effective way to invest in gold.
- Inflation Hedge: Gold is often seen as a hedge against inflation, and GLD offers a convenient way to gain exposure to gold without having to buy physical gold.
GLD is considered by many to be the premier gold ETF on the market. This $62 billion gold fund is one of the most convenient, low-cost, highly liquid ways any investor – large or small – can participate in the gold market and benefit from the inflation protection that owning gold offers.
GLD was the first U.S.-traded gold ETF and the very first ETF to be backed entirely by a physical commodity. Investors have been depending on this reliable ETF for almost 20 years.
iShares Gold Trust (IAU)
The iShares Gold Trust (IAU) is a popular choice for those looking to invest in gold. This fund aims to track the spot price of gold by holding gold bars in vaults around the world. Compared to other gold ETFs, IAU offers a lower expense ratio, making it a cost-effective option for investors.
Key Features
- Expense Ratio: 0.25%
- 2024 YTD Performance: 19.5%
- Five-Year Annual Return: 10.3%
Why Choose IAU?
- Cost-Effective: With a low expense ratio, IAU provides a budget-friendly way to invest in gold.
- Diversification: Adding gold to your portfolio can help protect against inflation and market volatility.
- Accessibility: You can trade this ETF easily through any brokerage account.
IAU offers a convenient and affordable way to gain exposure to the gold market, making it a solid choice for both new and experienced investors.
Performance Overview
| Metric | Value |
|---|---|
| NAV as of Aug 22, 2024 | $46.91 |
| 52-Week Range | $34.44 – $47.80 |
| 1-Day NAV Change | -0.28 (-0.60%) |
| YTD NAV Total Return | 20.93% |
Investment Objective
The iShares Gold Trust aims to reflect the performance of the price of gold. It is not registered as an investment company under the Investment Company Act of 1940, which means it is not subject to the same regulatory requirements as mutual funds or other ETFs.
Important Considerations
- Not Insured: Shares of the Trust are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
- Redemption: Shares can only be redeemed in large aggregated units called "Baskets" by authorized participants.
For those looking to diversify their portfolio with a reliable gold investment, IAU is a strong contender. It offers a balance of cost-effectiveness and performance, making it a top choice for many investors.
VanEck Gold Miners ETF (GDX)
VanEck launched GDX in 2006, making it the first gold miners ETF in the U.S. This $13 billion fund aims to replicate the performance of the NYSE Arca Gold Miners Index, minus fees and expenses. The expense ratio for GDX is 0.51%, but its performance closely matches its benchmark.
GDX invests in major names in the mining sector, including companies that mine for gold, silver, and copper. This makes it a popular choice for those looking to diversify their portfolios.
The fund’s performance is highly influenced by the price of gold. When gold prices rise, GDX tends to appreciate more, offering higher beta exposure. Conversely, it may decrease more when gold prices fall.
For investors who can handle the volatility, GDX offers a way to diversify and hedge against inflation, with the potential for significant capital appreciation.
VanEck Junior Gold Miners ETF (GDXJ)
The VanEck Junior Gold Miners ETF (GDXJ) focuses on small-cap mining companies that generate at least half of their revenue from gold and silver. This ETF is a great choice for those looking to invest in the junior mining sector. About 50% of the companies in this fund are based in Canada.
Key Features
- Expense Ratio: 0.52%
- 2024 YTD Performance: 11.1%
- Five-Year Annual Return: 4.9%
Investment Strategy
GDXJ invests in foreign small-cap mining companies, making it a unique option for those interested in the junior mining sector. The index tracks the performance of the most liquid junior companies in the global gold and silver mining industry.
This ETF offers a way to diversify your portfolio with exposure to smaller mining companies that have the potential for significant growth.
GraniteShares Gold Trust (BAR)
GraniteShares Gold Trust (BAR) is a solid choice for those looking to invest in gold. This ETF holds gold directly in a London vault, managed by ICBC Standard Bank. Its price closely follows the spot price of gold, making it a reliable option for tracking gold’s market value.
Key Metrics
| Metric | Value |
|---|---|
| 2024 YTD Performance | 19.0% |
| Five-Year Annual Return | 11.1% |
| Expense Ratio | 0.175% |
Why Choose BAR?
- Low Expense Ratio: With an expense ratio of just 0.175%, BAR is one of the most cost-effective gold ETFs available.
- Direct Gold Investment: The fund invests directly in physical gold, providing a straightforward way to gain exposure to the precious metal.
- Professional Management: The gold is stored in a secure vault and managed by a reputable institution, ensuring its safety and authenticity.
Investing in BAR offers a simple and low-cost way to add gold to your portfolio, making it a great option for both new and experienced investors.
Considerations
While BAR is a great option, it’s important to remember that investing in gold can be volatile. The price of gold can fluctuate based on market conditions, so it’s wise to consider your risk tolerance before investing.
Conclusion
Gold ETFs are a smart choice for anyone looking to earn passive income in 2024. They offer a simple way to invest in gold without the hassle of buying and storing physical gold. Plus, they can help protect your money from inflation. By choosing the right gold ETFs, you can enjoy steady returns and peace of mind. So, whether you’re new to investing or a seasoned pro, gold ETFs can be a valuable addition to your portfolio.
Frequently Asked Questions
What is a Gold ETF?
A Gold ETF is a type of investment fund that holds gold-related assets. It allows you to invest in gold without having to buy, store, or sell the physical metal.
How do Gold ETFs work?
Gold ETFs work by tracking the price of gold or investing in gold mining companies. When you buy shares of a Gold ETF, you are essentially buying a portion of the fund’s gold holdings.
Why should I invest in Gold ETFs?
Investing in Gold ETFs can be a good way to protect your money from inflation and market crashes. Gold often keeps its value over time, making it a safe investment.
What are the risks of investing in Gold ETFs?
Like all investments, Gold ETFs come with risks. The price of gold can go up and down, and there can be costs associated with managing the ETF. It’s important to do your research before investing.
How can I buy Gold ETFs?
You can buy Gold ETFs through most online brokerage accounts, just like you would buy stocks. Look for a broker that offers low fees and good customer service.
Are there different types of Gold ETFs?
Yes, there are different types of Gold ETFs. Some track the price of gold, while others invest in gold mining companies. It’s important to choose the one that best fits your investment goals.
Alexander is a veteran financial advisor with over 25 years of experience specializing in precious metals and retirement planning. As a Certified Financial Planner (CFP) and former senior analyst at a leading gold investment firm, Alex has guided countless individuals in securing their financial futures through strategic gold investments.
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