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 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’s FUM meets our hurdle
The Global X 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.
Pay attention to yearly costs & fees
Global X 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.
Our takeaway
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 Global X 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.