ETF's are a form of security designed to track a basket of stocks
or the physical of an underlying product. A Gold ETF tracks either
the price of gold or comprises a basket of gold shares designed to
track the price of the underlying gold stocks and gain exposure to
rises and falls in the price of gold. As an investing or trading vehicle,
gold exchange traded funds are perceived as a safe haven during inflation
or times or uncertainty.
When there is a movement in gold, a gold ETF is a great way to trade
short term momentum. As a loner term strategy, in times of inflation
or perceived risk, a gold ETF can be used as part of an overall investment
strategy.
An example of a Gold ETF's based on gold bullion prices is the
Streettracks gold ETF (GLD), as traded on the New York Stock Exchange.
Investors and traders can purchase a position in this fund in the
same way they buy and sell shares.
iShare Comex Gold (IAU) is another fund that is a simple and effective
way of replicating a similar investment in gold.
Van Eck's Market Vectors Gold Miners ETF (GDX)
This fund seeks to track and match the performance of the AMEX Gold
Miners Index by investing in a basket of gold stocks that generally
replicate the index.
The top 10 holdings of this fund include the following:
Barrick Gold Corp:15.87%
Newmont Mining Corp: 10.77%
AngloGold Ashanti Ltd Depository Receipts: 6.21%
Freeport McMoRan Copper & Gold Inc: 5.97%
Goldcorp Inc: 5.90%
Gold Fields Limited Depository Receipts: 5.28%
Harmony Gold Mining Co Ltd Depository Receipts: 4.77%
Glamis Gold Ltd: 4.53%
Kinross Gold Corp 4.41%
Agnico-Eagle Mines Ltd: 3.79%
There many other Gold ETf's listed on foreign Exchanges. They include
the following:
ZKB Gold ETF: This product is listed and traded in Switzerland.
Central Fund of Canada (CEF): This fund keeps the bulk of its assets
in gold and silver with an appointed custodian.
GOLD is an exchange traded fund based on the price of gold bullion
and traded on the Australian Stock Exchange.
In London, you can also traded in gold exchange traded funds. (BULL)
tracks the DJ-AIG Gold Sub Index. (PHAU) is backed by allocated
gold bullion.
Gold ETF's are also traded on the Indian, Japanese and Paris exchanges.
They are an alternative to holding the physical asset or purchase
futures on COMEX.
Next Article: Commodity ETF
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