A similar scenario is seen with gold ETFs where the SPDR Gold Shares (NYSEArca: GLD) is the preferred gold ETF among the hedge fund set even though it charges 0.4% per year, 15 basis points more than the iShares Gold Trust (NYSEArca: IAU). John Paulson’s hedge fund, Paulson & Co., was the largest holder of GLD shares at the end of the second quarter with a stake of 10.23 million shares. [Hedge Funds Stick With Gold ETFs]
Hedge funds preferring liquidity over expenses can also be seen with gold miners ETFs. For example, George Soros and David Einhorn’s Greenlight Capital own large positions in the Market Vectors Gold Miners ETF (NYSEArca: GDX).
GDX charges 0.53% per year compared to 0.39% by the iShares MSCI Global Gold Miners ETF (NYSEArca: RING). However, GDX is not only the largest gold miners ETF by assets, but with average volume of nearly 29.6 million shares, it is also one of the most heavily traded ETFs of any type. RING trades just 56,500 shares per day on average.
iShares MSCI Emerging Markets ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM, GLD and IEMG.