Is there an index fund that tracks the index for precious metals? How about a fund that tracks an index just for gold?(I guess this is not possible) And is there a fund that tracks overall commodities index? Answers specific to the Canadian investors are most welcome :)
asked Aug 24, 2011 at 20:24
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2 Answers
I don't know answers that would be specific to Canada but one of the main ETF funds that tracks gold prices is GLD (SPDR Gold Trust) another is IAU (iShares Gold Trust).
Also, there are several ETF's that combine different precious metals together and can be traded. You can find a fairly decent list here on the Stock Encylopedia site.
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IAU is the iShare ETF, lower fees, interesting that GLD is the most popular, maybe better ad agency? Aug 24, 2011 at 22:05
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"The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion." - So this is not actually investing in gold? If it is then why would it not reflect the price of Gold?– user4127Aug 25, 2011 at 17:08
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@Chad, To make the shares affordable, it's likely that each share represents less than one ounce of gold. I believe that IAU is basically 1/100th oz. per share and GLD is 1/10 oz (in both cases, as of when the fund started, and reduced very slightly due to expenses). Read more carefully and you will see each fund does in fact hold gold, buying and selling as needed as people buy into or out of the funds. Aug 26, 2011 at 18:56
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@Chuck - Is it buying physical gold or contracts?– user4127Aug 26, 2011 at 19:00
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@Joe Taxpayer, GLD is slightly older, maybe it just got a head start? That or there is a psychological effect of it's higher price per share? Maybe due to 10x lower fee's for anyone paying a per share commission when trading it? or a better ticker symbol? (after all what non chemistry geeks remember AU is the chemical symbol for gold?) Hard to know, but I'd agree that the slightly lower expenses would make IAU the better choice if you are trading on a flat rate per trade basis. Aug 26, 2011 at 19:00
Barclays offers an iPath ETN (not quite an ETF), DJP, which tracks the total return of the Dow Jones-AIG Commodity Index.
