GLD: The Gold Standard for ETF Investing 🥇

Hi ETF UNO readers, we're excited to introduce you to a unique ETF: GLD, the SPDR Gold Trust!

GLD doesn't track companies, sectors, or regions, but instead tracks gold, a precious metal that has been valued for centuries. If there were a 'must-have' in the diverse world of ETFs, especially for those seeking a hedge against volatility, GLD might be on that list.

What is GLD?

The SPDR Gold Trust (GLD) is an ETF that aims to reflect the performance of the price of gold bullion, minus the Trust's expenses. Unlike most ETFs, which track indices or baskets of stocks, GLD is backed by physical gold. GLD's gold bullion is stored as 400-ounce Good Delivery gold bars in its London vault or by several custodians worldwide. The ETF has an annual expense charge of 0.40%.

Gold as an Investment

Gold has been a prized possession for centuries, and its value as an investment has been tested by time. Throughout history, gold has been used as a currency, a store of value, and a hedge against inflation.

The first gold coins were minted in Lydia, a region of what is now Türkiye, around 560 BC. Gold quickly became a popular form of currency throughout the ancient world, and it remained so for centuries. In fact, the gold standard, a monetary system in which the value of a currency is directly tied to the price of gold, was used by many countries until the early 20th century.

In addition to its use as currency, gold has also been valued as a store of value. Gold is durable, portable, and relatively scarce, making it an ideal asset to hold during times of economic uncertainty. For example, gold prices often rise during periods of high inflation, as investors look to protect their wealth from the erosion of purchasing power.

Gold is also a popular hedge against inflation. Unlike paper currencies, which can be devalued by governments, gold has a finite supply and its value is determined by market forces. As a result, gold prices rise over time, roughly in line with inflation.

Today, gold is more popular than ever as an investment. Investors can buy gold in various ways, including physical bullion, gold coins, and gold ETFs.

ETFs: A smart way to invest in gold

ETFs offer investors an innovative, relatively cost-efficient and secure way to access the gold market without purchasing and storing physical bullion.

• 💰Budget-Friendly: With ETFs, you get the gold without burning a hole in your pocket. No treasure chests or security vaults needed!

• 💧Swipe to Sell: Gold ETFs are traded on various exchanges globally, making them easy to buy and sell to investors worldwide.

• 🔒Secure: ETFs are held in trust by custodians, so investors don't have to worry about storing or transporting physical gold.

GLD at a glance

Asset Class: Commodity - Precious Metal (Gold)

Expense Ratio: 0.40% (as of last data point)

Historical Performance

While GLD might not boast the same aggressive growth as some equity ETFs, its allure lies in stability. Historically, gold's value has often surged during market stress, geopolitical unrest, or high inflation, making GLD a valuable asset in uncertain times.

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

Top 3 Reasons to Invest in GLD

1. Inflation Protection: With rising inflation concerns, gold often serves as a reliable protector of wealth.

2. Tangible Asset: Unlike stocks or bonds, gold is a tangible asset with intrinsic value.

3. Global Demand: With increasing demand from sectors like electronics, jewellery, and central banks, gold's relevance remains high.

Top 3 Reasons Not to Invest in GLD

1. Storage Costs: Although GLD mitigates many of the challenges of holding physical gold, there are still storage and insurance costs, reflected in the expense ratio.

2. No Dividend: Unlike stocks, GLD doesn't provide any dividend income.

3. Dependent on Gold Prices: The value of GLD is directly tied to the price of gold, making it susceptible to gold market volatility.

A Golden Voyage: The GLD ETF 🌍

Gold, a precious metal with a millennia-old history, continues to be a popular investment choice. The GLD ETF provides a convenient and accessible way for investors to gain exposure to gold.

While gold can offer a degree of stability, it is important to diversify your portfolio with other assets. As you embark on your investment journey, we invite you to explore the many other shimmering opportunities in the ETF world.

Happy investing!

DISCLAIMER: None of this is financial advice. This newsletter is 100% educational and is not investment advice to trade ETFs or any other assets or make financial decisions. Please be careful and do your research.