Are these the best Gold ETFs on ASX in 2023?
Investors can access physical gold and gain exposure to the gold price through exchange traded funds on the ASX. The stock exchange has both physical gold and gold miner ETFs.
Check out 10 of the top Gold ETFs on ASX
Global X Physical Gold
Perth Mint Gold
BetaShares Gold Bullion ETF
VanEck Gold Miners ETF
BetaShares Global Gold Miners ETF
VanEck Gold Bullion ETF
Data as of 3 July 2023. Source: ASX Investment Products - May 2023.
*The list of funds mentioned is ranked by market capitalisation. When deciding what ETFs to feature, we analyse the financials, recent news, state of the industry, and whether or not they are actively traded on Stake.
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Watch these gold ETFs in Australia
1. Global X Physical Gold ($GOLD)
Assets under management (AUM): $2.80b
Stock price (as of 03/07/2023): $26.66
Stake Platform Bought / Sold (1 Jan 2023 - 03 Jul 2023): 62% / 38%
Global X Physical Gold is backed by physical gold bars held in a vault in London. JP Morgan Chase is responsible for the individually identified and allocated gold bars on behalf of investors. The set up matches the global standards set by the London Bullion Market Association’s (LBMA). Like many commodities, gold is usually priced in U.S. Dollars.
This physical gold ETF product tends to reflect the movements of the gold price in Australian Dollars less the annual management fee. This means that shifting exchange rates will affect the returns. Unhedged securities like $GOLD can benefit from a falling Australian Dollar versus the U.S. Dollar, as the currency gains would also be passed onto investors if all other factors are equal.
🆚 Compare these ETFs: GOLD vs GDX→
2. Perth Mint Gold ($PMGOLD)
Assets under management (AUM): $645.44m
Stock price (as of 03/07/2023): $28.71
Stake Platform Bought / Sold (1 Jan 2023 - 03 Jul 2023): 100% / 0%
Perth Mint Gold is an exchange traded product that tracks the gold price in Australian Dollars. It is backed by physical gold bullion stored in the Perth Mint and the Government of Western Australia guarantees the metals on behalf of investors. It has the lowest management fee amongst the gold ETF products on the ASX at 0.15%.
One concern is that the Perth Mint is currently being investigated for potentially failing to comply with regulations, which could affect its future. They relate to issues checking client identities and the purity of some metals sold by the group.
🆚 Compare these ETFs: PMGOLD vs GOLD→
3. BetaShares Gold Bullion ($QAU)
Assets under management (AUM): $464.40m
Stock price (as of 03/07/2023): $16.34
Stake Platform Bought / Sold (1 Jan 2023 - 03 Jul 2023): 67% / 33%
The BetaShares Gold Bullion is also backed by physical gold bars held in a JPMorgan Chase vault in London, with a similar setup to $GOLD. However, $QAU is a currency hedged ETF. This manages the fluctuations in the Australian and U.S. Dollar exchange rate through financial instruments so that investors have minimal exposure to these changes.
The returns should largely reflect those of the gold price and exclude currency risk. For example, if the Australian Dollar increases in value compared to the U.S. Dollar, this scenario could negatively impact returns. This ETF product has a slightly higher management fee at 0.59% compared to $GOLD's 0.40%.
4. VanEck Gold Miners ETF ($GDX)
Assets under management (AUM): $459.85m
Stock price (as of 03/07/2023): $45.02
Stake Platform Bought / Sold (1 Jan 2023 - 03 Jul 2023): 30% / 70%
The VanEck Gold Miners ETF provides exposure to a number of gold mining companies listed on an NYSE Arca index. The firms are located across the world, but nearly 48% are listed in Canada, 16% in the U.S. and 14% in Australia. These include some of the world's largest gold miners like Newmont ($NEM), Barrick Gold ($GOLD) and Franco-Nevada ($FNV).
Around 93% of the ETF's holdings are related to gold production. Some of the businesses earn up to 20% of their revenues from silver production. Investors can benefit from a distribution once a year and the gold mining ETF has an expenses ratio of 0.53%. The performance will be affected by the results from the various gold miners, rather than mainly by the gold price.
💡Related: Discover these ASX silver mining companies→
5. BetaShares Global Gold Miners ETF ($MNRS)
Assets under management (AUM): $59.61m
Stock price (as of 03/07/2023): $5.25
Stake Platform Bought / Sold (1 Jan 2023 - 03 Jul 2023): 41% / 59%
The BetaShares Global Gold Miners ETF tracks an index of gold mining firms listed outside of Australia. It includes a number of the same companies as $GDX, but it is not exactly the same. In contrast, it is a currency hedged product and provides distributions twice a year. This ETF's fee is also slightly higher at 0.57%.
Around 80% of the holdings are dedicated to gold mining, while the remaining 20% is in the production of other precious metals like silver. In terms of the country exposure, around 45% of miners are in Canada, 15% in South Africa and 12% in the U.S. This ETF has 48 holdings as at the end of June 2023, while $GDX had 45.
6. VanEck Gold Bullion ETF ($NUGG)
Assets under management (AUM): $7.57m
Stock price (as of 03/07/2023): $28.87
Stake Platform Bought / Sold (1 Jan 2023 - 03 Jul 2023): 90% / 10%
The VanEck Gold Bullion ETF is another option for investors interested in exposure to the gold price. The product is backed by physical gold bullion, which is only sourced from Australian gold producers. The gold bars are stored in the Perth Mint vault in Western Australia.
The list of registered gold bars held through the ETF is published daily. This ETF is not currency hedged, so its performance could be similar to that of the $GOLD ETF. The returns would be similar to the spot gold price, minus its fee of 0.25%.
💡Related: Watch these stocks for gold mining companies in Australia→
What is the largest gold ETF in the U.S.?
SPDR Gold Shares ($GLD) is the largest gold ETF by funds under management (FUM) in the U.S. market. It's designed to track the price of gold bullion in the over-the-counter (OTC) market. As at July 2023, it had over US$57b of FUM and its gold bullion is held in a vault in London. Other popular gold ETF options on Wall Street include:
Why invest in Gold ETFs?
Gold ETFs provide a cost effective and simple way to invest in the precious metal. Buying, storing and insuring physical gold requires organisation and comes with considerable expenses, while the management fees for ETFs usually account for these costs.
The entry point to investing in a gold ETF is usually much lower for individuals. ETFs also generally give much greater diversification than one or two gold mining companies, whose performance is more likely to be affected by their own actions rather than the gold price.
Many consider gold to have safe haven status, which means that they expect the price to go up or at least be stable during periods of economic downturns or instability. The gold metal itself is still seen as a physical store of value, in contrast to most financial securities and paper money. Gold is often characterised as one of the best hedges against inflation and other negative macroeconomic trends, so it can be viewed as a way to diversify your investment portfolio beyond traditional equities.
Gold ETFs in Australia FAQs
Are gold ETFs a good investment?
The performance of gold ETFs is often influenced by the price of the precious metal. They're usually a cheaper option than investing in physical gold itself and are less volatile than shares of a single gold firm. The specific kind of gold ETF can be affected by currency movements. The gold price has historically been known for its stability and occasional outperformance during periods of high inflation. However, its status as a safe haven asset is no guarantee in the future.
What ASX gold stocks can I invest in?
In terms of mining companies, gold is the most commonly searched for metal and the ASX has multiple firms across various stages of development. Some of the major producers include firms like Northern Star Resources ($NST), Evolution Mining ($EVN) and Perseus Mining ($PRU). A takeover bid from global giant Newmont ($NEM) for ASX's largest gold miner by market cap, Newcrest Mining ($NCM), is currently being assessed. Check out our list for more ASX gold stocks.
What is the difference between investing in gold ETF vs gold bullion?
Investing in gold bullion involves buying, insuring and storing physical gold. Gold ETFs purchase the gold bars, and are then responsible for managing them and organising deals to store them in secure vaults on behalf of their investors. The costs are usually less on a larger scale and should be covered by the management fees.
Investors might not always be able to access fractions of the gold bars and need enough cash to purchase the entire bullion at the start. Gold ETFs can provide a lower entry point in this respect. ETFs can be traded in a similar manner to shares, so investors can realise their potential gains quickly instead of coordinating a deal to safely sell a gold bar themselves.
The value of gold ETFs are also indicated in real time by stock exchanges and investment platforms should indicate trading fees. The value of a transaction of a physical gold bar might be affected by its individual circumstances and could result in a greater difference to the gold price compared to ETF returns after subtracting management fees.
This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.
Megan is a markets analyst at Stake, with 7 years of experience in the world of investing and a Master’s degree in Business and Economics from The University of Sydney Business School. Megan has extensive knowledge of the UK markets, working as an analyst at ARCH Emerging Markets - a UK investment advisory platform focused on private equity. Previously she also worked as an analyst at Australian robo advisor Stockspot, where she researched ASX listed equities and helped construct the company's portfolios.