You might be sitting back and considering the ETF Securities Physical Gold ETF (ASX: GOLD) and thinking that December could be as good of a time as any to take closer look. Here’s how we would start our research.
Find out what the ETF does
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’s FUM meets our hurdle
The ETF Securities GOLD ETF had $2186.83 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.
Pay attention to yearly costs & fees
ETF Securities charges investors a yearly management fee of 0.4% 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.
If you’re thinking about investing in GOLD, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free ETF Securities GOLD report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Commodities sector to do a good comparison.