This Low-Cost Alternative to GLD Tops $1 Billion | ETF Trends

The SPDR Gold MiniShares (NYSEArca: GLDM), which debuted in June 2018 as a cost-effective alternative to the SPDR Gold Shares (NYSEArca: GLD), recently topped $1 billion in assets under management, confirming the notion that investors like a good deal when it comes to ETFs.

GLDM’s annual fee is 0.18%, or $18 on a $10,000 investment. That makes GLDM one of the least expensive gold ETFs on the market today and significantly less expensive than GLD, which carries an annual fee of 0.40%.

“For many investors, costs associated with buying and selling the Shares in the secondary market and the payment of GLDM’s ongoing expenses will be lower than the costs associated with buying and selling gold bullion and storing and insuring gold bullion in a traditional allocated gold bullion account,” according to State Street.

Gold Prices Surging

With gold prices surging this year, GLDM has been one of the top asset-gathering ETFs, adding nearly $520 million in new assets on a year-to-date basis.

““The combined resources of the World Gold Council, a leading authority on all aspects of the gold market and State Street Global Advisors, a pioneer in ETF investing, provides gold investors with compelling investment offerings and robust research and thought leadership on the role of gold in a portfolio,” said Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors, in a statement. “Our low-cost gold ETF with a share price hovering around USD15, GLDM has resonated with financial advisors, digital advice platforms and buy-and-hold retail investors.”

Gold ETFs are pushing to the upside amid increased expectations of a U.S. rate cut, even as some investors locked in profits from bullion’s recent rally. Gold is believed by many investors to be inversely correlated with interest rates. Rising interest rates make bonds and other fixed-income investments more attractive so that the money will flow into higher-yielding investments, such as bonds and money market funds, and out of gold, which offers no yield at all during times of higher interest rates, and back into gold ETFs.

Related: BlackRock, Vanguard Dominating ETF League Table 

With central banks throughout the world pursuing lower interest rates, GLDM and other gold ETFs could be poised for more upside in the fourth quarter.

“In November 2004, the World Gold Council and State Street Global Advisors democratized gold investment for investors with the launch of SPDR Gold Shares (GLD), the first US-traded gold ETF and the first US-listed ETF backed by a physical asset. GLD remains the largest and most liquid gold ETF in the market with approximately USD43.2 billion in total net assets and USD5.23 billion of net new inflows year-to-date,” according to the statement.

For more gold investing news and strategy, visit our Gold category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.