Gold’s surge to record prices has put gold exchange traded funds (ETFs) on a tear. There are the familiar options – physically backed, gold miners, futures based. A fourth option launched in February, and it could use some explaining.

One place investors have placed their money is in Sprott Physical Gold Trust (NYSEArca: PHYS), which has more than $700 million in assets after holding a secondary public offering in February of this year, reports John Spence of Market Watch. [Gold ETFs Seen as a Safe Haven.]

PHYS is unique in that it lets investors redeem shares for gold bullion, as long as the amount covers at least one London Good Delivery Bar, or 400 troy ounces. Each share represents 1/100th of a troy ounce.

The unique “call-option” of this fund drives share prices above net asset value by an average of 7% to 8%. In May, that premium hit 20 percent, but has since fallen to about 10 percent.

Nicholas Colas, chief market strategist at ConvergEx Group noted that the high premium investors are willing to pay seems to indicate how investors view gold as an investment, reports Adrian Ash of Bullion Vault. [Before You Buy Gold.]

On other fronts, Ian Henderson of J.P.Morgan Asset Management said, “We have increased our exposure to gold.”