Gold ETFs: Top 5 picks for December 2022

1. SPDR Gold Shares / Gold MiniShares

The most popular gold ETF in terms of assets under management (AUM) today is the SPDR Gold Shares (GLD). GLD currently holds 906 tonnes of gold in trust and currently sports just over $50 billion in AUM. The ETF is popular due to its well-developed options chain, good daily volume, and low bid-ask spread.

However, its expense ratio (0.40%) isn't exactly cheap. While this doesn't deter traders, buy-and-hold investors looking for a long-term investment might baulk at it. To remedy this, State Street launched the SPDR Gold MiniShares (GLDM), a lower-priced alternative. 

Shares of GLDM currently trade at around $34 at the time of writing (November 22nd), compared to $162 for GLD, making the former capital efficient. The expense ratio is also much lower at 0.10%. Liquidity is still good, with low bid-ask spreads, but there's no options chain. 

2. iShares Gold Trust / iShares Gold Trust Micro

GLD's biggest and longstanding competitor is the iShares Gold Trust (IAU), which has just over $25 billion in AUM, making it around half the size of GLD. Like GLD, IAU is also highly liquid and has a high daily traded volume. It also has a lower expense ratio at 0.25%.

In response to GLDM, iShares launched a lower-cost version of IAU on June 15th, 2021, called the iShares Gold Trust Micro (IAUM). It originally debuted with a 0.15% expense ratio, but that was slashed to 0.09% recently, making IAUM the cheapest gold ETF on the market. 

3. abrdn Physical Gold Shares

The abrdn Physical Gold Shares (SGOL) sits in a weird spot – it's not as popular, large, or as widely traded as GLD, nor is it as cheap as GLDM. Still, the fund has some benefits for buy-and-hold gold investors who favor transparency. It's also fairly cheap, with an expense ratio of 0.17%. 

SGOL actually holds allocated gold, meaning that you, the investor, is an owner of a certain amount of bullion as opposed to just a creditor for an aggregate deposit. SGOL also publishes a daily list of the bars held, with their brand, serial number, assay, and vault location. 

4. GraniteShares Gold Trust 

The GraniteShares Gold Trust (BAR) operates in a pretty similar way to SGOL: holds physical gold bullion bars in a London vault, audits it twice a year, and publishes a daily list of individual holdings with serial numbers, brand names, weights, fineness, and packing ID. 

There's not much to say about BAR that hasn’t been noted already. Like most of the ETFs listed here, it's liquid, tracks the spot price of gold well, and charges a low expense ratio (0.1749%). Like SGOL, each bar of gold is segregated, individually identified, and allocated. 

5. Sprott Physical Gold Trust

The Sprott Physical Gold Trust (PHYS) isn't actually an ETF, but I'm including it on this list due to its popularity. PHYS is actually a close-ended fund, which does not issue additional shares after the initial public offering. Why is this important to know?

Well, it means that the market price of PHYS can occasionally diverge from its net asset value (NAV), trading at either a discount (due to excess supply) or a premium (due to overwhelming demand). This adds another dimension that prospective investors need to be aware of. 

PHYS currently has $5.47 billion in AUM and charges an expense ratio of 0.41%, which, along with its close-ended structure, explains its lower popularity. However, it is dual-listed in Canada and the U.S., so it’s a favorite among Canadian investors. 

Please note this article is for information purposes only and does not constitute investment advice.