Gold

Going for the Gold With This ETF

For investors who are interested in getting into precious metals such as gold, the Aberdeen Standard Physical Gold Shares ETF (SGOL) may be worth considering.

The fund was designed to track the spot price of gold and has roughly $3 billion allocated to physical gold bars stored in a Zurich-based vault. For investors looking for greater peace of mind regarding their investment, the fund’s vault is audited twice a year and the holdings are posted daily to the fund sponsor’s website.

The fund is structured as a grantor trust, which prevents trustees from lending the underlying gold. Moreover, due to its structuring, investors do not need to worry about filing a K-1 tax form or other tax-related necessities related to this particular investment. Further, SGOL shares currently trade at 1/100^th of the spot price for gold, which may appeal to investors wishing to place smaller orders.

SGOL has the lowest expense ratio of any fund in this particular category, coming in at 0.17%. The fund has $2.62 billion in assets under management and $2.67 billion in net assets. Year to date, it has a total daily return of 23.57%. Unsurprisingly, the fund felt the March lows, but in mid-April, the fund hit a new all-time high since the start of 2020.

In early August, SGOL hit its latest all-time high at $19.50. As of today, the fund is currently trading at $18.14. Though it saw a small drop in late November, it has worked its way back up.

Chart courtesy of www.stockcharts.com

Aberdeen Standard Physical Gold Shares ETF (SGOL) can be an appealing fund for investors wanting to make their way into precious metals as it provides updated information on its sponsor’s website and tracks the daily price movement of gold at a far less expensive price than similar funds, such as SPDR Gold Shares (GLD).

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Moreover, precious metals often are considered a tactical allocation, with about five to 10% of one’s portfolio dedicated to this asset class. SGOL’s non-correlated price pattern can be an attractive attribute, since it potentially can help offset losses elsewhere during periods of market stress.

Even so, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goal.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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 Successful Investing, 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.