shined once again in 2012 as the price of the metal rose for its
twelfth consecutive years (
Gold ETFs: Is the Sell-Off Overdone?
). With uncertainty in the economic environment, investors
generally opt for safe havens such as gold, to invest in, even
though the stock market generally saw a solid performance for the
trailing one year period.
Apart from acting as a safe haven at times of economic
uncertainty, gold has been performing well in the past few years
as central banks across the globe strive to stimulate economic
growth and investors seek gold acts as an inflation hedge or a
safeguard against a debased currency.
Gold is generally considered to be a commodity that maintains
its purchasing power even when the economy is under inflationary
pressure, so for investors concerned about rising prices in the
long term it has been a solid pick (
A New Breed of Gold ETFs on the Horizon?
Gold's Year in Review
The commodity started 2012 at a level of about $1580/oz. and
touched a level of $1800/oz. by the month of October. Prices then
fell to close out the year as a number of risk events came off
the table, dulling the appeal for the yellow metal.
Still, the product finished 2012 above$1,680/oz. representing
another solid year for the product. Overall, it looks as though
gold added about 4.7% in the time period, marking a dozen
calendar years of price increases, something that few asset
classes can say for the same time frame.
How to Play
There are many ETF choices in the physically backed gold
space, however, the most popular among them is the
SPDR Gold Shares (
which tracks the spot price of gold. The fund manages an asset
base of $72.2 billion and trades at volume level of more than 11
million shares a day (
The Comprehensive Guide to Gold ETF Investing
The fund charges investors 40 basis points on annual basis
delivered a return of 9.2% over a period of one year. On the last
trading day of the year, the ETF closed at $162.02, ending the
year at a growth of around 4.65%. The fund has touched a low of
$148.53 and a high of $174.07 over a 52-week period.
Beyond this ultra popular choice, investors also have a few
others to pick from in the gold market. These include the
following solid options, any of which also offer physically
backed and liquid exposure to the gold market:
iShares COMEX Gold Trust (
ETFS Physical Swiss Gold Shares (
ETFS Physical Asian Gold Shares (
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ETFS-ASIAN GOLD (AGOL): ETF Research Reports
SPDR-GOLD TRUST (GLD): ETF Research Reports
ISHARS-GOLD TR (IAU): ETF Research Reports
ETFS-GOLD TRUST (SGOL): ETF Research Reports
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