Exchange Traded Funds (ETFs)

Consider This Fund to Invest in Gold

The iShares Gold Trust (NYSEARCA:IAU) tracks the gold spot price, less expenses and liabilities, using gold bars held in vaults around the world.

IAU is an efficient way for investors to hold physical gold. For retail investors, the fund removes the complexities of buying, transporting, storing and insuring physical gold.

Using a grantor trust structure, the fund is very stable. The underlying gold bars are held in vaults around the world, with an inventory list available on the issuer’s website.

Similar to its competitor, SPDR Gold Trust (NYSEARCA:GLD), investors should take into consideration that long-term gains have noteworthy tax liabilities, since IAU is considered a collectible.

The daily net asset value (NAV) of the trust is based on a given day’s LBMA Gold Price PM. Where IAU shines for buy-and-hold retail investors is in its low expense ratio of 0.40%.

At launch, shares of IAU corresponded to 1/100th of an ounce of gold (though this will decrease over time due to expenses). The fund has $29 billion in assets under management and offers a solid choice for gold investors.

Source: StockCharts.com

The investment seeks to reflect generally the performance of the price of gold. The Trust seeks to reflect such performance before payment of expenses and liabilities. It is not actively managed.

The fund does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of gold. An investment in physical gold requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing and insurance of the metal.

However, any interested investors should exercise their own due diligence in deciding whether or not this fund fits their own individual portfolio needs and goals.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.