Gold ETF 2024: A Practical Guide to Choosing Among the Best Exchange-Traded Funds

Why Gold Remains a Safe Bet in 2024

The precious metal has gained prominence in recent months. Geopolitical tensions in Ukraine and the Middle East, combined with uncertainty over the FED’s monetary policies, have raised alarms among investors seeking protection. Meanwhile, global central banks continue to accumulate reserves: according to recent surveys, 71% of central banks plan to increase their holdings over the next 12 months.

The result? Stable and diversified demand coming from jewelry (581.5 tons in Q4 2023), investment (258.3 tons), central institutions (229.4 tons), and technology (80.6 tons). This combination ensures that gold demand rarely falls below 1,000 tons annually.

What type of gold ETF to choose?

There are two main categories: physically backed (which custody actual bars in vaults of banks like HSBC or JP Morgan) and synthetic (which use derivatives like futures or options). The first offers greater security but with slightly higher fees. The second presents lower costs but introduces counterparty risk.

For most retail investors, physically backed gold ETFs are the safest option. They allow exposure to the metal without storage issues and with exceptional liquidity.

The 6 best gold ETFs for 2024: comparative analysis

1. iShares Gold Trust Micro ETF (NYSE: IAUM) - The most economical choice

This is the gold ETF with the lowest fee in the market: just 0.09% in annual expenses. With $1.2 billion in assets, it trades at $21.73 per share and has risen 6.0% in 2024. Its daily volume of 344,000 shares makes it accessible for investors with limited capital. Since its launch in 2021, it has accumulated a return of 22.82%.

2. SPDR Gold MiniShares ETF (NYSE: GLDM) - Low cost with respectable volume

GLDM charges 0.10% annual fees, just a tenth of a percent above the previous. With $6.1 billion in assets under management and a daily volume of 2 million shares, it offers a better balance between accessibility and liquidity. It trades at $43.28 and has gained 6.1% so far this year, with a historical return since 2009 of 72.38%.

3. Aberdeen Physical Gold Shares ETF (NYSE: SGOL) - Trusted Swiss custody

Based in Switzerland, SGOL backs its holdings in secure vaults in Switzerland and the UK. Its fees are 0.17% annually. At just $20.86 per share, it is the most affordable in price. It manages $2.7 billion in assets and trades 2.1 million shares daily. It has generated returns of 106.61% since 2009.

4. Goldman Sachs Physical Gold ETF (NYSE: AAAU) - Premium institutional backing

This Goldman Sachs fund charges 0.18% in fees, below the industry average of 0.63% for commodity ETFs. With custody in British vaults via JPMorgan Chase, it holds $614 million in assets. At $21.60 per share, it has accumulated a 79.67% total return since 2009.

5. iShares Gold Trust ETF (NYSE: IAU) - Best historical performance

IAU stands out with 0.25% in fees and $25.4 billion in assets. It trades 6 million shares daily at $41.27. It is the gold ETF with the best historical performance since 2009: 151.19% total return. It has grown 6.0% so far in 2024.

6. SPDR Gold Shares ETF (NYSE: GLD) - Market giant

GLD is the largest with $56 billion in assets and a volume of 8 million shares daily. Its fees are 0.40% annually. At $202.11 per share, it has a higher entry cost but offers unmatched liquidity. It has accumulated a 146.76% return since 2009 and has risen 6.0% in 2024.

Cumulative performance: comparison 2009-2024

Over 15 years, the spot gold price has yielded 162.31%. The ETFs that have best followed this trend are IAU (151.19%) and GLD (146.76%). The newer ones like IAUM, launched in 2021, still show lower figures (22.82%), although in line with their period of existence.

Global debt as a catalyst for investing in gold

Worldwide governments have drastically increased their debt levels since 2008. The United States maintains a public debt-to-GDP ratio of 129%, while Japan reaches an alarming 263.9%. This situation has eroded the purchasing power of global fiat currencies.

Jerome Powell, FED Chairman, publicly acknowledged that “the United States is on an unsustainable fiscal path” in the long term. This context reinforces the thesis that gold ETFs can act as a hedge against potential reconfigurations of the international financial system.

Criteria for selecting your gold ETF in 2024

1. Define your time horizon: Gold prices fluctuate in the short term. If your goal is long-term protection, better tolerate these oscillations.

2. Consider the expense ratio: Although they seem insignificant, the difference between 0.09% and 0.40% compounded over 20 years is substantial. Products like IAUM or GLDM maximize your net returns.

3. Choose based on your available capital: If you have limited funds, SGOL (20.86 dollars) or IAUM (21.73 dollars) are accessible entry points. If you seek maximum liquidity, GLD is unbeatable.

4. Maintain diversification: Gold does not generate income like dividends, so it should not exceed 10-15% of a typical portfolio. Combine it with stocks, bonds, and cryptocurrencies.

5. Watch the macroeconomic context: Optimal entry points are when stock market volatility increases or when central banks remain “hawkish” (restrictive with rates).

The opportunity of the moment

With the tech rally showing signs of exhaustion and geopolitical uncertainty at its peak, gold ETFs offer a cushion of stability. Small investors can access with modest amounts thanks to affordable ETFs with low fees.

You now know the six main contenders with their features, costs, and historical returns. What remains is for you to define your risk tolerance, specific objectives, and investment horizon. With that clear information, you will be prepared to make the best decision for your portfolio in 2024.