Pros and Cons of Gold Exchange Traded Funds

Gold Exchange Traded FundsWith gold prices being currently on the rise, investment in gold exchange traded funds is gaining popularity. Gold exchange traded funds make gold investing easy due to the fact that physical gold doesn’t change hands and you are investing into securities of gold bullion that are held in one centralized spot. When you are buying a share from gold exchange traded funds, you are purchasing a gold security worth about one tenths or a gold ounce. Each one of gold investment funds possesses a unique gold bullion ticker distinguishing it from the rest of funds.

Gold exchange traded funds track the current market price of gold and profit when it’s on the rise. Since you do not actually hold any physical gold, it’s important to research each and every gold exchange traded funds to make sure that physical gold is stored at a country with safe political and economic environment that protects the safety of its financial institutions.

Before you rush into gold ETF investing, learn a few basic pros and cons associated with this type of gold investment.

Investing in gold exchange traded funds is beneficial due to no additional costs associated with storage of physical gold or worrying about the safety of your gold bullions.

There’s no set limit of investing into gold bullion ETF, you can decide to invest as low as $100 a month. With purchasing physical gold bullions, you do not have such luxury and must pay substantial amounts every time your purchase gold.


Investing in gold exchange traded funds comes with a small fee of 0.4% of total purchase price plus annual storage, insurance and management fees.

You do not actually hold any physical gold and in case your gold exchange fund does go under in harsh economic times, you are left with nothing.

You do not have an option to trade in your ETF shares into actual gold in case you do decide to own physical gold.