Gold ETFs

Gold Exchange Traded Fund (GETF) is a unique type of exchange-traded fund for it tracks the actual price of gold in the market. But like any other stocks, they are traded in major cities of the world such as New York, London, Paris, Toronto and others. Simply put this way, these GETFs are the ones to acquire gold for you, of course using your investment, and converting it into paper. The paper can be in physical or dematerialized form, and is called a unit. Units are the counterpart of shares or stocks of a company. There are minimum units to purchase and it depends on where you are trading. Below are some of the major GETFs:

Exchange Traded Gold – sponsored by the World Gold Council and listed under Gold Bullion Securities (ASX: GOLD); Lyxor Gold Bullion Securities (LSE: GBS and Euronext: GBS); SPDR Gold Trust (NYSE: GLD, SGX: GLD, TYO: 1326); and New Gold Issuer (JSE: GLD). The most liquid and largest GETF in the market as of 2008 is SPDR Gold Trust.

iShares COMEX Gold Trust – launched in January 2005 and listed under New York Stock Exchange (NYSE: IAU) and Toronto Stock Exchange (TSX: IGT).

ZKB Gold ETF – based in Switzerland with a symbol of ZGLD. Its minimum buy is one unit and shares are sold in 1 kg gold units.

Central Fund of Canada –headquartered in Alberta, Canada and a close-end fund. Listed in Toronto Stock Exchange (TSE: CEF .A) and New York Stock Exchange (NYSE: CEF).

ETFS Physical Gold

Gold Benchmark Exchange Traded Scheme – founded by Benchmark Asset Management Company of Mumbai, is listed on the National Stock Exchange of India with ticker symbol “GOLDBEES”.

Gold-Price-Linked Exchange Traded Fund – launched on August of 2007 and has a code “1328”. Smallest purchase of ten units, shares are sold in 1-gram gold units.

But before you get a little excited remember that every venture has its own pros and cons. Do take time to evaluate each item on the list, and who knows it may save you some trouble in the future…

PROS

- Tend to increase its value when other segments of the market are losing thus can be used as a hedge.

- Investors do not have to worry storage and management.

- No more uncertainties on the quality of gold.

- Saves time and effort for investors who do not know where and how to buy gold bars or coins.

CONS

- During a depression, GETF assets can be subject to an obligatory purchase by the government.

- Many investors still believe that it does not produce an actual value including one of the world’s greatest stock market investors and philanthropist Warren Buffet.

- Investors only become general creditors when an ETF provider goes into liquidation.

Again, these are just basic guides. Aside from the abovementioned points, you could also ask around. The Internet is a powerful medium in gathering vital information and evaluating your options. You can also watch specific TV programs that feature experts and actual investors on GETFs to get the latest trends and free tips. Remember it pays to know!

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