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Since the first exchange-traded fund was introduced 20 years ago, the ETF industry has grown into a trillion-dollar business. Today's traders and investors have access to an increasing number of ETFs, offering exposure to a wide variety of popular and niche markets. One of these is the precious metals ETF market, which provides exposure to gold, silver, platinum and palladium. Precious metals funds invest in both physical commodities and futures contracts for precious metals. Here we will take a look at some of the most affordable precious metals ETFs on the market today.
COMEX Gold Trust (IAU)
The COMEX Gold Trust is designed to correspond generally to the day-to-day price movement of gold bullion, and shares are backed by physical gold. IAU, which was launched on Jan. 21, 2005, has an expense ratio of 0.25 per cent, total net assets exceeding $11-billion and an average three-month volume of more than 6 million.
E-TRACS CMCI Gold Total Return ETN (UBG)
The E-TRACS CMCI Gold Total Return ETN is designed to track the performance of the UBS Bloomberg CMCI Gold Total Return Index, which measures the returns from a basket of gold futures contracts. Launched on April 1, 2008, UBG has an expense ratio of 0.30 per cent, total net assets of $17.3-million and an average three-month volume of less than 6,000.
ETFS Physical Silver Shares (SIVR)
ETFS Physical Silver Shares is designed to replicate the price of silver bullion, and shares are backed by physical silver held by a custodian. With an inception date of July 24, 2009, SIVR has an expense ratio of 0.30 per cent, total net assets of $585.4-million and an average three-month volume of more than 200,000.
EFTS Physical Asian Gold Shares (AGOL)
Physical Asian Gold Shares is designed to track the price of physical gold bullion. The gold is held in trust and stored in Singapore. The fund, which was launched on Jan. 14, 2011, has an expense ratio of 0.39 per cent, total net assets of $82.56-million and an average three-month volume of 1,510, with an increase in daily volume recently.
EFTS Physical Swiss Gold Shares (SGOL)
EFTS Physical Swiss Gold Shares is designed to track the price of physical gold bullion, and shares are backed by physical gold held in trust in Switzerland. SGOL, which was launched on Sept. 9, 2009, has an expense ratio of 0.39 per cent, total net assets exceeding $1.9-billion and an average three-month volume of more than 70,000.
List of precious metals ETFs
The table below lists the 22 non-leveraged precious metals ETFs that are currently available to investors and traders. They are listed in order of expense ratio, from lowest to highest.
Ticker | Description | Commodity | Expense ratio |
IAU | COMEX Gold Trust | Gold | 0.25% |
UBG | E-TRACS CMCI Gold Total Return | Gold | 0.30% |
SIVR | ETFS Physical Silver Shares | Silver | 0.30% |
AGOL | EFTS Physical Asian Gold Shares | Gold | 0.39% |
SGOL | EFTS Physical Swiss Gold Shares | Gold | 0.39% |
GLD | SPDR Gold Trust | Gold | 0.40% |
USV | E-TRACS UBS Bloomberg CMCI Silver ETN | Silver | 0.40% |
SLV | Silver Trust | Silver | 0.50% |
PPLT | Physical Platinum Shares | Platinum | 0.60% |
WITE | Physical White Metal Basket Shares | White metals | 0.60% |
GLTR | Physical Precious Metal Basket Shares | Broad | 0.60% |
PALL | Physical Palladium Shares | Palladium | 0.60% |
GLDI | Gold Shares Covered Call ETN | Gold | 0.65% |
PTM | E-TRACS UBS Long Platinum ETN | Platinum | 0.65% |
PGM | DJ UBS Platinum Trust Sub-Index ETN | Platinum | 0.75% |
JJP | DJ UBS Precious Metals TR Sub-Index ETN | Broad | 0.75% |
BLNG | Pure Beta Precious Metals ETN | Broad | 0.75% |
DGL | DB Gold Fund | Gold | 0.79% |
DBP | DB Precious Metals Fund | Broad | 0.79% |
RGRP | Rogers Enhanced Precious Metals ETN | Broad | 0.95% |
TBAR | Gold Trendpilot ETN | Gold | 1.00% |
The bottom line
While these affordable precious metals ETFs are ranked based on expense ratio, other factors should be considered when determining the affordability and suitability of any exchange-traded fund. It is also important to understand the precious metals market. As with any investment, it is essential to conduct appropriate research prior to making any investment decisions.