Global physically gold-backed ETFs marked a fourth consecutive month of positive inflows in January. In these volatile markets, more investors may look to gold in order to diversify their portfolios and hedge risks down the road.
On the upcoming webcast, Why 2019 Might Be The Year for Gold ETFs, George Milling–Stanley, Vice President and Head of Gold Strategy at State Street Global Advisors, and Juan Carlos Artigas, Director of Investment Research at World Gold Council, will take a look at why gold may be a strategic asset that should be considered in all market conditions.
ETF investors who are interested in accessing the gold markets now have a number of options to choose from. For example, the SPDR Gold Shares (NYSEArca: GLD), the most liquid and largest physically backed gold-related ETF on the market, has been the go-to ETF option for gold exposure.
Investors have looked to GLD as a quick and easy way to gain exposure to gold price movements as they hedge against market risks, help protect their purchasing power in times of inflationary pressures or capitalize on increasing demand from the emerging markets with a growing middle-income class.
The World Gold Council and State Street Global Advisors also expanded on the gold ETF theme with the launch of a relatively new offering that provides the cheapest exposure along with a low share price to those investors seeking exposure to the yellow precious metal. The SPDR Gold MiniShares Trust (NYSEArca: GLDM) has a 0.18% expense ratio and was initially listed at a per-share trading price of 1/100th of an ounce of gold, as represented by the LBMA Gold Price PM (USD). The low cost gold ETF has quickly been attracting attention from buy-and-hold investors who are interested in the long-term benefits of incorporating a cheap gold investment in a diversified portfolio
GLDM’s strategy is identical to GLD – both are physically backed by gold bullion and are structured as grantor trusts. However, GLD’s price was 1/10th the price of gold in ounces at its inception while the Gold MiniShares ETF was priced at 1/100th the price of gold in ounces.
Additionally, if the U.S. dollar strengthens, investors may still capture the potential upside in gold or hedge against potential market risks without worrying about an appreciating USD through the SPDR Long Dollar Gold Trust (NYSEArca: GLDW). The dollar-hedged gold ETF may help investors gain exposure to gold bullion price movements and limit the negative effects of potential market volatility, without worrying about a stronger U.S. dollar.
Financial advisors who are interested in learning more about the gold market can register for the Tuesday, March 19 webcast here.
[1] World Gold Council, Gold Demand Trends, January 31, 2019.