Well, gold has been causing quite a splash in the investing world lately. Last week’s announcement from US President Donald Trump that the last of the tariff-free Chinese imports would be taxed going into the US has spooked global markets in a big way, and when investors get spooked, it’s always gold that they turn to. The gold price is now at its highest level since the Greek debt crisis of 2012, breaking the US$1,440 per ounce level for the first time since 2013. In Australia, things are even more interesting, with an ounce of gold at its highest AUD price ever, over $2,140/oz.
However, gold is often mentally out of reach for the average investor, with the costs of transportation and storage too daunting to consider. Exchange Traded Funds (ETFs) could be an easy alternative to owning physical bullion for the average investor. Here are two ASX ETFs for easy gold investing:
ETFS Physical Gold ETF (ASX: GOLD)
With a ticker symbol easy to remember, this ETF takes your cash and buys physical gold bullion with it. Simple. The gold is stored in a London bank vault and each bar is numbered and audited regularly, so security concerns are not an issue here. This ETF provides a simple ASX alternative to owning the bullion yourself and the share price will rise and fall with the gold price (in US dollars). GOLD charges a 0.4% management fee.
VanEck Vectors Gold Miners ETF (ASX: GDX)
Rather than physical metal, this ETF invests in the mining companies that dig the gold out of the ground. In a rising gold price environment, the shares of gold miners will often rise more than the commodity itself, due to the leveraged nature of a miners’ balance sheet. Therefore, this ETF is a ‘riskier’ bet on the price of gold, but with a 21% YTD performance so far for GDX, it can also be a lucrative one. GDX charges a management fee of 0.53%.
Both of these ETFs offer a simple, easy way for the average investor to add some gold exposure to a portfolio. Gold is often touted as an inflation hedge as well as a bulwark against a falling stock market – therefore you might want to do some research and ‘get in’ on gold if you’re so inclined.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.