Christian Magoon: DUST is the best gold ETF by far in 2012.
BEST GOLD ETF FOCUSES ON…GOLD MINERS???
The best gold ETF in 2012 is a daily inverse leveraged gold mining ETF from Direxion with the ticker symbol (NYSEARCA:DUST). It has benefited from the poor performance of gold mining stocks in 2012. The fund is one of two ETFs from Direxion that seeks to provide the daily performance +/- 300% of NYSE Arca Gold Miner Index.
Most users of these funds are institutions and traders who are comfortable with a holding period of one day or less, constantly monitor the ETFs and understand the considerable volatility these leveraged funds can deliver. (NYSEARCA:NUGT), the + 300% gold mining ETF from Direxion, is down over 55% in 2012 making it the worst performing gold ETF.
More notably, the three largest physical gold ETFs are in positions three, four and five on the list. Physical gold ETFs store bars of gold in a vault. These bars back the ETF shares being traded in the marketplace. The objective of this popular type of gold ETF is to deliver the price performance of gold, less fund fees and expenses.
THE BEST PHYSICAL GOLD ETF
(NYSEARCA:IAU) from iShares has the lowest peer group expense ratio at 25bps. That lower burden is helping it outperform the other physical gold ETFs during a year with about 1% worth of gains.
Right behind the best gold ETF in the physical category is the ETF Securities Swiss Gold Trust (NYSEARCA:SGOL). SGOL stores all its underlying gold in a vault in Switzerland, the only gold ETF to provide this Swiss only storage mandate.
In last place on the top five list is the largest gold ETF in the world, the SPDR Gold Trust (NYSEARCA:GLD). Despite being the largest gold ETF, it maintains the highest expense ratio of the peer group at 40bps. This drag on performance is material enough for it to be pushed down to the third best U.S. listed performing gold ETF. Initially being number three sounds like a decent position except that it takes place in a gold ETF universe of four funds. Only the Asian Gold Trust (NYSEARCA:AGOL) from ETF Securities trails GLD in 2012 performance.
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.”