Gold ETFs: They Hold the Gold, So You Don’t Have To
Investors have always loved gold. (Also, pirates.) Gold holds its value, because, you know, they’re not making any more of it.
But holding your own gold is a hassle. You’ve got to find a reputable place to buy it, and a safe place to store it. You’ve got to manually calculate its value. And like a Kardashian, you have to question its purity.
The idea of a gold ETF was a breakthrough: rather than hiding coins under their bed, investors could just buy shares of a fund, just like buying shares of a company. The fund would hold the gold, so you wouldn’t have to.
The first true gold ETF launched in Australia in 2003, but the big one was SPDR Gold Shares, which launched in the US in 2004. Demand was unprecedented, with 50 million shares trading on its first day. It crashed major trading platforms, who couldn’t keep up with the volume.
The price of gold saw a short-term bump, but it’s the long-term results that we’re interested in. Check out how the price of gold grew along with gold ETFs: | 