Types Of Gold Exchange Traded Funds

A gold exchange-traded fund (GETF) refers to an exchange-traded fund (ETF) that tracks the price of gold. GETFs are traded on the major stock exchanges like those in Zurich, London and New York. Late last year, gold ETFs held 1,750 tons of gold in total for private and institutional investors. 

If youre planning to include gold in your investment portfolio, you should be aware of the various types of gold ETFs that may fit your specific strategy. There are different types of gold ETFs to consider before selecting the options that are best for you. Some include futures while others are gold assets held in trust. Still other gold ETFs act as industry ETFs and track the gold mining sector. Below are three kinds of GETFs that can help you realize your investing goals.

Gold ETFs with gold products the great thing about gold ETFs is that you can invest in gold without really buying gold doubloons and hiding them in the attic safe. Gold ETFs like IAU and GLD monitor the performance of gold by including gold products like bullions in a trust. This covers the liabilities of the fund on an as-needed basis.

Gold ETFs with gold futures certain types of gold ETFs are made differently to track the performance of gold. A gold ETF like DGL consists of derivatives like futures, forwards and options to emulate a gold index. This same construction strategy is not limited to gold ETFs but utilized for numerous commodity ETFs at the same time.

Gold industry ETFsanother kind of gold ETF is composed of companies in the gold industry. Like a sector ETF, this kind of gold ETF monitors companies that use gold as their core business. For instance, GDX tracks the performance of the Amex Gold Miners Index that consists of companies in the gold mining industry.