The gold price has reached historic highs in 2024, rising above US$2,400 per ounce. For Australian investors, the price of the yellow metal has surged above the AU$3,700 mark in just the past few months.
These gains have come as investors anticipate interest rate cuts, and against a backdrop of continued geopolitical turmoil in Ukraine and the Middle East. Gold has also been buoyed by central bank and Chinese buying.
For many investors, gold is a tool for diversification. The precious metal is known for its ability to act as a safe haven and hence operates as a protective option when building a balanced portfolio.
Gold exchange-traded funds (ETFs) give investors a relatively easy way to get exposure to physical gold without having to worry about the extra hassle of buying and storing the metal — not to mention insuring it.
Gold ETFs can also track a basket of gold-focused stocks, allowing investors to spread risk between companies.
Below the Investing News Network has listed the four biggest ASX gold ETFs that provide exposure to physical gold. The ETFs are listed by assets under management, and data was retrieved from each company’s website on May 28, 2024.
1. Global X Physical Gold (ASX:GOLD)
Total assets under management: AU$3.04 billion; current share price: AU$32.51
Previously known as ETFS Physical Gold, Global X Physical Gold is an exchange-traded product (ETP) that promises a "low-cost and secure way to access physical gold via the stock exchange" while avoiding the struggle of storage.
The entity is backed by gold held in a London vault by JPMorgan Chase (NYSE:JPM). Investors can redeem shares for physical gold, not just the cash equivalent; however, this comes with a fee of AU$1,000 per redemption. Global X's website suggests that for smaller orders, a more cost-effective option is selling units on the secondary market.
This ETP has a management fee of 0.4 percent per annum.
2. Perth Mint Gold (ASX:PMGOLD)
**Total assets under management* AU$828 million; current share price: AU$32\.45*
Owned by the Western Australian government, Perth Mint Gold is an ETP that tracks the international price of gold in Australian dollars. Investments are backed by gold bullion stored in the Perth Mint. Perth Mint Gold is the only gold product on the ASX that maintains a government guarantee for holdings.
This ETF has a management fee of just 0.15 percent, making it the lowest-cost physical gold ETF on the ASX.
3. BetaShares Gold Bullion ETF (ASX:QAU)
**Total assets under management* AU$570\.39 million; current share price: AU$19\.62*
The BetaShares Gold Bullion ETF tracks the price of physical gold. It is backed by gold bullion stored by JPMorgan Chase in London. Although the ETF is based on physical gold, you do not own physical gold by owning the ETF. Rather, when you sell shares of your ETF, you receive the cash equivalent of the gold.
This ETF has a management fee of 0.59 percent.
4. Van Eck Gold Bullion ETF (ASX:NUGG)
**Total assets under management* AU$61\.82 million; current share price: AU$35\.03*
The Van Eck Gold Bullion ETF allows investors to enjoy the reliability of the gold market without the need to purchase physical gold. It is backed by physical gold bullions bars sourced from Australian gold producers.
This ETF has a management fee of 0.25 percent.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.