Many investors have knowledge of traditional ETFs, but not all are familiar with gold exchange traded funds. ETFs are mutual funds which are being traded like ordinary stock in the market, with a fixed and precise portfolio which is unchangeable. Such is the premise of a gold ETF as well, only this time, the portfolio will have gold exposure. The upside of this is that there will be no hassle in storing the metal, according to financial website The Street. It further observed that investing in gold ETFs is an effective tool for traders to hedge other gold positions.
Bear in mind that the precious metal is an ideal item to be included in an investor’s portfolio, and experts are of the opinion that those who would like to delve into long-term investments should have at least 5-10% gold investment as a strategy. An analysis of the gold investment and trading site Bullion Vault supports this claim, stating that doing so is part of adding strong assets to one’s portfolio. Gold, as a “non-correlated asset”, is considered as one of those which will not turn for the worse as other investment options go bad. A word of warning was given by ThisIsMoney.co.uk: as an investor, an understanding of the difference between physical (actual purchase of gold) and synthetic (which are set up to mirror its price) of exchange traded commodities is imperative.
Recent news at Equities.com, a global financial community, observed that the rise in gold prices (presumably brought about by the US dollar dip) drove up the ETFs of precious metals. A recorded gain of 4.5% for gold prices has been reported since the first half of this month, and ETFs connected to the metal increased along with it. Several big gainers enjoy up to 13%-16% as of last week, so it’s high time that we consider including gold ETFs in our stock portfolios.