First U.S. gold ETF poised to launch

The World Gold Council has filed its last registration statement with the SEC for an exchange-traded fund tied to gold bullion, signaling the ETF could be launched as soon as next week. The highly-anticipated fund would allow U.S. investors to invest directly in gold via an exchange-listed security for the first time. Gold ETFs have already been listed in England, Australia, and South Africa.

The World Gold Council is the market development organisation for the gold industry. With our unique insight into the global gold market, we see unrealised potential for gold across society and intervene to create new possibilities.

Working with world-class organisations across the supply chain, we stimulate demand, develop innovative uses of gold and take new products to market. As the global authority on gold, we offer comprehensive analysis of the industry, giving decision makers unparalleled information and insight into the drivers of gold demand.

Buying shares of gold ETFs is a great way to take advantage of the volatility of the precious metals market without getting directly involved in commodities trading. Typically, these ETFs track a family of stocks, which all rise and fall based on the commodity trading price of gold.

These are the 5 largest gold ETFs by average volume as of December 13, 2016. Note that we’re comparing the trading volume of the ETFs themselves, rather than the volume of assets under management.

SPDR Gold Shares (GLD)

Issuer: State Street Global Advisors
Average Volume: 9,800,000 shares
2016 YTD Performance: 8.81%
Expense Ratio: 0.40%

Formerly the top-trading ETF in the world by volume, SPDR Gold Shares has fallen out of the top 10 in recent years. But it’s still a high-volume fund with excellent performance and a low expense ratio as compared to other precious metals ETFs. This exchange-traded fund has the highest average volume of any gold ETF currently traded.

Unlike other ETFs on this list, GLD trades in bullion directly. Each share is meant to track the price of one-tenth of an ounce of gold. If the share prices spike and outperform gold, the manager of this fund exchanges blocks of 100,000 shares for 10,000 ounces of gold.

As of the beginning of the year, this fund owned over 21 million ounces of gold bullion and had in excess of $23 billion under management.

iShares Gold Trust (IAU)

Issuer: iShares
Average Volume: 8,900,000 shares
2016 YTD Performance: 9.09%
Expense Ratio: 0.25%

iShares formed its Gold Trust ETF as a direct competitor to State Street’s Gold Shares ETF, and in many ways, it has outperformed the other fund. IAU is second in average volume, but it leads the rest of the pack by millions of shares.

IAU has an extremely low expense ratio and a proven track record of exceptional performance. Like State Street’s Gold Shares fund, iShares Gold Trust is unique in that it holds physical gold rather than stock in companies that mine and refine raw gold.

This fund has $7.4 billion in of assets under management, which equates to roughly 7 million ounces of bullion in its vaults.

VelocityShares 3X Long Gold (UGLD)

Issuer: Credit Suisse
Average Volume: 464,200 shares
2016 YTD Performance: 16.69%
Expense Ratio: 1.35%

The VelocityShares Triple Long Gold Fund takes an optimistic position on the price of gold. Since the price of gold rose in 2016, and since this is a triple-long fund designed to amplify the gains in the gold market as a whole, it was the best-yielding fund on this list by far. (See also: What Drives The Price Of Gold?)

This gold ETF is an excellent fund for anyone who is bullish on the rising cost of gold. Although it’s a moderate-volume fund, UGLD had an excellent 2016. It’s not as large or heavily-traded as some on this list, but it outperformed all of them in 2016.

DB Gold Double Short (DZZ)

Issuer: PowerShares
Average Volume: 129,200 shares
2016 YTD Performance: -23.90%
Expense Ratio: 0.75%

The DB Gold Double Short fund takes the opposite approach of UGLD. This fund takes an aggressively short position on the price of gold. As such, it had a difficult time turning a profit in a market that’s mostly seen a slow rise without too many sudden falls – which short funds rely on to make money.

Regardless of its 2016 performance, DZZ is a moderate-volume fund that’s designed to deliver good returns as the price of gold falls. If you’re an investor who’s counting on the cost of a troy ounce plunging, this fund is a good choice.

VanEck Merk Gold Trust (OUNZ)

Issuer: Merk Funds
Average Volume: 98,500 shares
2016 YTD Performance: 8.94%
Expense Ratio: 0.40%

OUNZ is a traditional, if small, gold ETF. The fund enjoyed good performance in 2016, and although it doesn’t have the amount of assets under management that larger funds do, it was able to turn a profit through smart investing.

Another moderate-volume fund, OUNZ is still the fifth-largest gold ETF on the Street. At just over $152 million in the fund, it’s got a fair amount of assets under management. It’s set up in a way that’s comparable to the iShares Gold Trust and SPDR Gold Shares funds, but its smaller size makes OUNZ less able to take advantage of favorable price fluctuations. (See also: What is the Relationship Between Gold and Gold ETFs?)

The top part of this story was supplied by CBSMarketWatch please visit www.gold.org. The rest of the story was from Investopedia

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