Top 5 ETFs offering straightforward access to gold investment:
Markets are turbulent, driving gold prices to unprecedented heights. As a potential investment strategy, gold ETFs stand out, offering individual investors a variety of advantages to gain exposure to the precious metal's price movements.
The gold market has been firing on all cylinders in early 2025, exemplified by a staggering 40% rise over the preceding 12 months, with gold now trading above $3,300 per troy ounce. Positive capital inflows into gold ETFs have contributed to these gains, but the broader macroeconomic landscape also supports gold investments.
Amid concerns surrounding economic uncertainty and inflation, gold has long been viewed as a proactive hedge for dedicated investors. With inflation rates climbing back up, exceeding the Bank of England's 2% target and expected to reach 3.7% later this year, and the intensifying trade tensions between the US and China, gold's allure as a safe haven becomes increasingly apparent.
Tom Bailey, head of research at HANetf, highlights this sentiment, noting that "gold has become an island of stability in a seemingly more chaotic world." While Trump's tariffs have triggered depreciation in equities and bonds, gold has emerged as a secure haven for investors in an era of economic discord.
As geopolitical risks mount, investors are re-examining portfolio protection strategies. Consequently, gold prices are on the rise as investors, wary of the escalating tensions across the Atlantic and in Europe, seek an anchor of safety.
Dzmitry Lipski, head of funds research at Interactive Investor, corroborates this sentiment, stating, "The historic role of gold has been as a store of value during economic crises." Given its long-standing reputation as a form of money, gold is believed to function as a hedge against inflation, with its value directly tied to the depreciation of the US dollar.
Financial advisors recommend maintaining a 2% to 10% allocation of a portfolio in gold, due to its volatility and lack of yield. Adding gold ETFs to one's portfolio can help shield portfolio returns while mitigating political and economic risks.
To integrate gold into a portfolio, investors have multiple options: accumulating gold jewelry or bullion, purchasing shares in gold mining companies, or investing in gold ETFs. The latter appears to be the most straightforward and cost-effective choice, offering exposure to gold price movements with minimal hassle.
Gold ETFs are funds that aim to mirror the price of gold. Some of the most straightforward gold ETFs are backed by physical gold, purchasing and storing bullion securely in vaults.
More sophisticated ETFs use derivatives or options to amplify returns but are riskier and carry higher fees. Consequently, when aiming for portfolio security, opting for uncomplicated ETFs is advisable.
Recent data shows European investors have added $4 billion to gold ETF holdings this year, a pronounced shift compared to the outflows experienced last year.
In addition to ETFs tracking gold prices, investors can also explore funds that invest in gold mining stocks; however, these options may be less efficient at capturing gold price movements due to the reliance on the profitability and operations of mining companies.
The beauty of physical gold ETFs lies in their simplicity and economical nature. These funds can frequently be held in a SIPP or an ISA and are accessible from most brokers or DIY investing platforms. For those considering adding gold to their portfolio, here are five options:
- HANetf Royal Mint Responsibly Sourced Physical Gold ETF (LON:RMAP). Offering a responsible approach to gold investment, the fund prioritizes LBMA-approved gold bars, manufactured post-2019, and supports the use of electronic waste in gold recovery.
- WisdomTree Physical Gold ETC (LON:PHGP), which carries an ongoing charge of 0.39% and is supported by HSBC Bank.
- WisdomTree Physical Swiss Gold ETC (LON:SGBS). If Swiss storage appeals to you, this ETC stores gold in Zurich under JPMorgan Chase Bank's watchful eye. The ongoing charge is 0.15%.
- iShares Physical Gold ETC (LON:SGLN), which invests in gold kept by JPMorgan Chase Bank in London, comes with an ongoing charge of 0.12%.
- VanEck Gold Miners ETF (LON:GDX), which invests in gold mining stocks, providing operating leverage and potentially higher returns for investors willing to tolerate more risk.
As economic uncertainty mounts and inflation remains high, some investors may find gold ETFs a prudent way to shield their portfolios against potential market volatility. Before making any investment choices, ensure to assess factors like fees, tracking efficiency, and liquidity, in the context of the broader economic landscape.
Gold's appeal as a safe haven increases in an era of economic discord, as it has been trading above $3,300 per troy ounce due to positive capital inflows into gold ETFs and broader macroeconomic factors. Inflation rates exceeding the Bank of England's target and tariffs intensifying trade tensions between the US and China contribute to gold's allure.
Financial advisors recommend investors maintain a portion of their portfolios in gold, and gold ETFs emerge as a straightforward and cost-effective choice to gain exposure to price movements. Europe has seen a significant shift in gold ETF holdings this year, with $4 billion added to these investments compared to outflows last year.
There are several gold ETF options available, such as the HANetf Royal Mint Responsibly Sourced Physical Gold ETF, WisdomTree Physical Gold ETC, WisdomTree Physical Swiss Gold ETC, iShares Physical Gold ETC, and VanEck Gold Miners ETF. Before making any investment decisions, it is crucial to consider fees, tracking efficiency, and liquidity in the context of the broader economic landscape.
