Christian Magoon: Gold ETF investors have had a phenomenal run in performance since the first physical gold ETF, the SPDR Gold Trust (NYSEARCA:GLD), launched in the United States in 1994. Since then it has been a story of temporary declines and a permanent advance for this top performing asset. While gold is well below its recent high, it is timely to review the major corrections gold ETF investors have experienced along the way. Here’s a terrific chart from Casey Research that puts the current gold price decline in perspective.
GOLD ETF CHOICES FOR INVESTORS
Currently there are four different gold ETF products listed in the United States that seek to track the price of gold. The first product as mentioned above is the famous SPDR Gold Trust (GLD). GLD seeks to track the price of gold, less fees and expenses. It has grown to over $65 billion in assets and is the largest single gold ETF in the world. In fact if it were a country, GLD would rank in the top 10 of known holders of gold.
The second largest gold ETF in the U.S. launched just after GLD. Sponsored by iShares, it is called the iShares COMEX Gold Trust (NYSEARCA:IAU). IAU is priced about 35% less than GLD in an effort to capture market share from GLD. At close to $10 billion it has a long way to go but is increasingly capturing a larger portion of new inflows into gold ETF products.
The third largest physical gold ETF is the ETF Securities Swiss Gold Trust (NYSEARCA:SGOL). This gold ETF takes the unique approach of storing all its gold in a vault located in Switzerland. In contrast GLD stores its gold in London and IAU stores its gold in London, New York and Toronto. SGOL has received enough interest to push it close to the $1.8 billion mark in assets.
By far the smallest gold ETF is the ETF Securities Asian Gold Trust (NYSEARCA:AGOL). This ETF stores all its gold in a vault located in Singapore. At around $75 million in assets this product has failed to garner significant interest thus far. Here’s the gold ETF list from GoldETFs.biz.
While gold ETF products that track gold price are off their highs, it’s important to gain the proper perspective on gold price volatility. Corrections have been more common than many think and have all led to rebounds.
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.”