What is the Best Silver and Gold ETF?

If you’re interested in investing in gold and silver, an Exchange Traded Fund (ETF) might be the easiest option for you. These exchange-traded funds invest directly in precious metals, so purchasing them through your brokerage account or robo-advisor should be simple.

Just make sure that leveraged gold ETFs and derivatives don’t present too much risk; physical bullion offers far more benefits.

iShares Gold Trust Micro ETF (IAUM)

Gold has long been considered an attractive, reliable investment that can serve as an asset diversifier and is considered a safe-haven asset, often increasing in value when stocks fall. Although investing directly can be expensive, cheaper alternatives such as ETFs are available for investing.

These exchange-traded funds offer exposure to stocks, bonds, currencies and commodities without the hassle of physically owning and storing gold bullion.

There are various gold ETFs on the market, but one that stands out among them is probably the iShares Gold Trust Micro ETF (IAUM). This ETF tracks the market price of physical gold bullion with an expense ratio of only 0.45%; making it the cheapest long-term buy-and-hold investment option. Unfortunately, IAUM may experience higher bid-ask spreads during periods of volatility which could eat into its returns and hinder returns.

Franklin Responsibly Sourced Gold ETF (FGLD)

Gold ETFs/ETCs have garnered great reader interest on VettaFi, so I am delighted to introduce Franklin Templeton’s entry into this field: Franklin Responsibly Sourced Gold ETF (FGLD). Built similarly to other US gold ETFs – as a grantor trust over allocated bullion – FGLD claims it is “responsibly sourced” because only purchasing LBMA Good Delivery bars. LBMA is a consortium of gold dealers, miners, refiners and transporters operating the world monopoly gold bullion exchange in London; their Good Delivery framework was specifically created to prevent harmful impacts from artisanal mining practices occurring elsewhere; thus their claim that is responsible sourcing can make perfect sense.

VanEck’s Gold Miners ETF (GDX) provides those looking for more of an active approach with their asset a way to invest in gold mining by holding market cap weighted stocks from Newmont, Barrick, Franco-Nevada and Agnico-Eagle – so its movements will correspond more with gold price increases as well as provide greater volatility during periods when gold prices decrease. This also means more volatility should prices decline or booms occur compared with GDX investments alone.

iShares MSCI Global Metals & Mining Producers ETF (ISM)

Precious metals should form an essential part of any portfolio. Used as money across the world for millennia, precious metals provide an effective hedge against market volatility, political unrest, inflation and currency devaluation as well as long-term wealth storage.

Like GLD, QAU and NUGG, this ETF is physically backed by physical gold bullion stored in vaults on behalf of investors. Fund managers publish an online list identifying each gold bar with information regarding refiner and weight.

GLD stands out as a physically backed ETF in that its tracker doesn’t track spot silver price directly; rather it tracks companies that mine metals like copper and aluminium instead. This allows this ETF to diversify away from volatile precious metal markets while giving investors less precious metal exposure; however, due to this extra diversification its expense ratio is higher than GLD or any of the other physically backed funds on this list.

iShares Silver Trust ETF (SLV)

The iShares Silver Trust ETF is one of the most acclaimed silver and gold exchange-traded funds (ETFs) on the market, boasting one of the strictest physically-backed methodologies on offer – all bullion must come from refiners accredited by London Bullion Market Association, or LBMA, while additional steps must be taken to ensure these refiners don’t engage in terrorist financing or money laundering activities. Furthermore, its holdings include Pan American Silver (PZN) and Hecla Mining (HL); these total less than 5% of total fund assets.

This ETF doesn’t offer the same tax advantages as its Global X counterparts; physical commodity ETFs are treated as collectibles for tax purposes, meaning you will pay a higher long-term capital gains rate than equity funds. Therefore, this ETF would best fit in an IRA account to maximize tax-advantages. Established since 2006 and boasting more than $11 billion under management assets under management iShares Silver Trust ETF has long been one of the biggest silver funds on the market.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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