they all share two elements: a focus on gold prices and no exposure to gold stocks. Here’s a snapshot of the best gold ETF and ETN products based off year to date performance from GoldETFs.biz.
The Five Best Gold ETF & ETN Products Year To Date. 8/28/2012
Each of the five best performing products happen to be from five different companies – VelocityShares, Deutsche Bank, ProShares, iShares and ETF Securities.
Three of the top five gold products employ leverage of between 200% – 300%. These include the Velocity Shares 3x Long Gold ETN (NYSEARCA:UGLD), DB Gold Double Long ETN (NYSEARCA:DGP), and the ProShares Ultra Gold ETF (NYSEARCA:UGL). Leveraged strategies are generally designed to produce the daily return of an index, thus holding periods are recommended to be one day or less. Here’s a well crafted explanation from ProShares’ Ultra Gold ETF (NYSEARCA:UGL) web page:
“This Ultra ProShares ETF seeks a return that is 2x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares’ returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced in funds with larger or inverse multiples and in funds with volatile benchmarks.”
BEST GOLD ETF FUNDS
In addition to the three leveraged gold products, two traditional gold ETFs that make up the best gold ETF and ETN products of 2012. The iShares Gold Trust (NYSEARCA:IAU) and the ETF Securities Swiss Gold Trust (SGOL) both gained over 6% for the year while seeking to track the price of gold. Notably absent is the largest physical gold ETF, the SPDR Gold Trust (NYSEARCA:GLD).
Traditional gold miners ETFs are still in negative territory for the year despite a recent resurgence in performance. Here’s the list of traditional gold stock ETFs ranked by year to date performance.
The best gold ETF focused on stocks is the largest gold stock ETF, GDX.
Christian Magoon is Publisher of GoldETFs.biz and IndiaETFs.com. He is also CEO of Magoon Capital, a strategic consultant firm to asset managers. Christian Magoon is an ETF insider, having launched over 40 ETFs in the United States to date. A widely recognized thought leader on finance and market issues, Christian regularly contributes to many financial media outlets. Prior to forming Magoon Capital in 2010, Christian was President of Claymore Securities (now Guggenheim Investments), where he built one of the fastest growing and most innovative ETF businesses in the country, gathering more than $3 billion in AUM in three years. He launched more than 40 ETFs, introducing many “firsts” to the U.S. market, including the first Frontier Markets, Sector Rotation, Solar Energy, Timber, BRIC and suite of China focused ETFs. Christian consistently provides his industry insights and knowledge as a commentator in the U.S. media speaking publicly on macro investment issues and ETF related topics. Follow him on Twitter @ChristianMagoon. In 2008, he was named by Institutional Investor News as one of the five people to watch in the U.S. ETF marketplace. In 2011, Financial Planning magazine dubbed Christian an “ETF Pioneer.”