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Gold on Track for Best Month Since May: 5 ETFs Shining
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After underperforming last year, gold has shown strength in recent weeks buoyed by investors’ flight to safety on the escalating Russia-Ukraine crisis. In fact, the yellow metal is hovering around $1,900 per ounce in the international market, gaining nearly 6% in February.
With gold prices rising, ETFs linked directly to the spot gold price or futures are also surging. Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report) , GraniteShares Gold Trust (BAR - Free Report) , VanEck Merk Gold Trust (OUNZ - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) and Perth Mint Physical Gold ETF (AAAU - Free Report) all gained nearly 3.7% in a month.
Russia-Ukraine Tension Becomes Hot
The tensions between the two countries worsened after Western countries slapped fresh sanctions on Russia for invading Ukraine and president Vladimir Putin put his country's nuclear deterrent on high alert. Western nations like the United States, Britain, Europe and Canada have blocked some Russian banks from the SWIFT international payments system. New measures also include restrictions on the Russian central bank's international reserves. The sanctions will be implemented in the coming days.
European nations and Canada shut down their airspace to Russian aircraft, an unprecedented step aimed at putting pressure on Putin to end his invasion of Ukraine (read: Russia-Ukraine Tensions Escalate: 3 ETFs to Buy).
Gold is often used as a means of preserving wealth during times of financial and political uncertainty. Given this, gold usually does well when other asset classes struggle.
Inflation Fears
Inflation has also emerged as a primary concern for investors, lifting the appeal for the bullion as an inflation hedge. The consumer price index jumped 7.5% year over year in January, marking the largest 12-month gain since February 1982. The pandemic-related supply chain disruptions and continued strength in consumer demand continued to push prices higher. The so-called core inflation, which strips out volatile components such as food and energy prices, rose 6% year over year, marking the biggest growth since August 1982 (read: Commodity ETFs to Hedge against Inflation).
Given the drive for inflation hedge and flight to safety, gold price is expected to increase further. As such, investors should tap the rally with the ETFs that are leading the way higher. Here’s a detailed discussion on the five ETFs mentioned earlier:
SGOL
Aberdeen Standard Physical Swiss Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in Zurich, Switzerland and London, United Kingdom.
Aberdeen Standard Physical Swiss Gold Shares ETF has amassed $2.6 billion in its asset base and trades in a solid volume of 1.3 million shares per day. It is among one of the lowest-cost choices in the space with an expense ratio of 0.17%. Aberdeen Standard Physical Swiss Gold Shares ETF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
BAR
GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account (read: Leveraged Gold ETFs to Play on Russia-Ukraine Tensions).
GraniteShares Gold Trust is also among the lowest cost gold ETFs on the market having an expense ratio of 0.17%. It has amassed $965.5 million in its asst base while trades in an average daily volume of 285,000 shares. GraniteShares Gold Trust has a Zacks ETF Rank #3.
OUNZ
VanEck Merk Gold Trust seeks to provide investors with a convenient and cost-efficient way to buy and hold gold through an exchange-traded product with the option to take physical delivery of gold if and when desired. It holds gold bullion in the form of allocated London Bars. VanEck Merk Gold Trust is the only gold ETF with a patented delivery process providing investors with the option to request delivery on any business day.
The fund charges 25 bps in fees per year. VanEck Merk Gold Trust is relatively unpopular and an illiquid option compared to others in the space with AUM of $621.7 million and an average daily volume of 195,000 shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.
GLDM
SPDR Gold MiniShares Trust seeks to reflect the performance of the price of gold bullion. It is a slightly modified alternative to the State Street behemoth gold fund SPDR Gold Trust ETF and holds roughly 1/10th as much gold per share.
SPDR Gold MiniShares Trust is the low-cost choice in the U.S. listed physically gold-backed ETF space, charging investors 10 bps in annual fees. It has $4.5 billion in AUM and trades in a solid average daily volume of 4.2 million shares. SPDR Gold MiniShares Trust has a Zacks ETF Rank #3 (read: ETF Areas to Consider to Combat Rising Inflation Concerns).
AAAU
Goldman Sachs Physical Gold ETF provides an easily accessible and cost-effective way to invest in gold with the understanding that the shares are underpinned by deliverable physical gold.
Goldman Sachs Physical Gold ETF has accumulated $686.2 million and trades in an average daily volume of 278,000 shares. It has 18 bps in annual fees.
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Gold on Track for Best Month Since May: 5 ETFs Shining
After underperforming last year, gold has shown strength in recent weeks buoyed by investors’ flight to safety on the escalating Russia-Ukraine crisis. In fact, the yellow metal is hovering around $1,900 per ounce in the international market, gaining nearly 6% in February.
With gold prices rising, ETFs linked directly to the spot gold price or futures are also surging. Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report) , GraniteShares Gold Trust (BAR - Free Report) , VanEck Merk Gold Trust (OUNZ - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) and Perth Mint Physical Gold ETF (AAAU - Free Report) all gained nearly 3.7% in a month.
Russia-Ukraine Tension Becomes Hot
The tensions between the two countries worsened after Western countries slapped fresh sanctions on Russia for invading Ukraine and president Vladimir Putin put his country's nuclear deterrent on high alert. Western nations like the United States, Britain, Europe and Canada have blocked some Russian banks from the SWIFT international payments system. New measures also include restrictions on the Russian central bank's international reserves. The sanctions will be implemented in the coming days.
European nations and Canada shut down their airspace to Russian aircraft, an unprecedented step aimed at putting pressure on Putin to end his invasion of Ukraine (read: Russia-Ukraine Tensions Escalate: 3 ETFs to Buy).
Gold is often used as a means of preserving wealth during times of financial and political uncertainty. Given this, gold usually does well when other asset classes struggle.
Inflation Fears
Inflation has also emerged as a primary concern for investors, lifting the appeal for the bullion as an inflation hedge. The consumer price index jumped 7.5% year over year in January, marking the largest 12-month gain since February 1982. The pandemic-related supply chain disruptions and continued strength in consumer demand continued to push prices higher. The so-called core inflation, which strips out volatile components such as food and energy prices, rose 6% year over year, marking the biggest growth since August 1982 (read: Commodity ETFs to Hedge against Inflation).
Given the drive for inflation hedge and flight to safety, gold price is expected to increase further. As such, investors should tap the rally with the ETFs that are leading the way higher. Here’s a detailed discussion on the five ETFs mentioned earlier:
SGOL
Aberdeen Standard Physical Swiss Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in Zurich, Switzerland and London, United Kingdom.
Aberdeen Standard Physical Swiss Gold Shares ETF has amassed $2.6 billion in its asset base and trades in a solid volume of 1.3 million shares per day. It is among one of the lowest-cost choices in the space with an expense ratio of 0.17%. Aberdeen Standard Physical Swiss Gold Shares ETF has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
BAR
GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account (read: Leveraged Gold ETFs to Play on Russia-Ukraine Tensions).
GraniteShares Gold Trust is also among the lowest cost gold ETFs on the market having an expense ratio of 0.17%. It has amassed $965.5 million in its asst base while trades in an average daily volume of 285,000 shares. GraniteShares Gold Trust has a Zacks ETF Rank #3.
OUNZ
VanEck Merk Gold Trust seeks to provide investors with a convenient and cost-efficient way to buy and hold gold through an exchange-traded product with the option to take physical delivery of gold if and when desired. It holds gold bullion in the form of allocated London Bars. VanEck Merk Gold Trust is the only gold ETF with a patented delivery process providing investors with the option to request delivery on any business day.
The fund charges 25 bps in fees per year. VanEck Merk Gold Trust is relatively unpopular and an illiquid option compared to others in the space with AUM of $621.7 million and an average daily volume of 195,000 shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.
GLDM
SPDR Gold MiniShares Trust seeks to reflect the performance of the price of gold bullion. It is a slightly modified alternative to the State Street behemoth gold fund SPDR Gold Trust ETF and holds roughly 1/10th as much gold per share.
SPDR Gold MiniShares Trust is the low-cost choice in the U.S. listed physically gold-backed ETF space, charging investors 10 bps in annual fees. It has $4.5 billion in AUM and trades in a solid average daily volume of 4.2 million shares. SPDR Gold MiniShares Trust has a Zacks ETF Rank #3 (read: ETF Areas to Consider to Combat Rising Inflation Concerns).
AAAU
Goldman Sachs Physical Gold ETF provides an easily accessible and cost-effective way to invest in gold with the understanding that the shares are underpinned by deliverable physical gold.
Goldman Sachs Physical Gold ETF has accumulated $686.2 million and trades in an average daily volume of 278,000 shares. It has 18 bps in annual fees.