Cheaper Gold ETF is in The Works

The World Gold Council (WGC) could introduce a new gold-backed exchange traded fund aimed at cost-conscious investors. The WGC issues the SPDR Gold Shares (NYSEArca: GLD), the world’s largest gold-backed ETF, in partnership with State Street Global Advisors (SSgA). GLD charges 0.40% per year, or $40 on a $10,000 investment.

“The World Gold Council, owner of the world’s largest gold-backed exchange traded fund (ETF), is launching a new fund with a cut-price management fee to fend off rivals with lower charges, reports Reuters, citing an unidentified source close to the issue.

GLD is the largest physically backed gold ETF on the market, providing investors exposure to gold price movement in an easy-to-use investment vehicle. The ETF is backed by physical gold bars stored in London vaults. The gold trust currently holds about 27.2 million ounces of gold, so each SDPR Gold Shares represents fractional ownership of the underlying gold.

Getting Competitive On Gold ETF Fees

The iShares Gold Trust (NYSEArca: IAU), GLD’s primary competitor, charges 0.25% per year. The GraniteShares Gold Trust (NYSEARCA: BAR) charges 0.20%. BAR debuted last August.

“GLD’s gold holdings have risen 5 percent since the start of last year while rival iShares Gold Trust (IAU.P), which is run by investment manager BlackRock (BLK.N) with a lower management fee, has grown 47 percent, by far the fastest growth among the five biggest gold ETFs tracked by Reuters,” reports the news agency.