Gold, Silver & Platinum Exchange Traded Funds (ETFs)

Advantages of Precious Metal ETFs

Precious metal ETF’s offer investors an new and cost efficient way to gain exposure to the precious metal markets. Through ETF’s investors can participate in the gold, silver and platinum bullion markets without the need to take physical delivery of bullion, and to buy and sell that interest by trading on a regulated stock exchange.

The ETF’s are intended to lower the barriers preventing investors from using gold, silver and platinum as an asset allocation and trading tool, including the logistics of buying, storing and insuring bullion.

Another advantage of ETFs is their low fee structure. ETFs have much lower total expense ratios (TERs - the total amount of money paid to cover the costs of fund management, trustees, licensing and operational costs) than traditional mutual funds or active funds, which means lower costs for the investor.

Possible Drawbacks of the Precious Metal ETFs

Because they are new and haven’t been bear market tested, it is not clear what will happen to the other precious metals ETFs when the bullion markets eventually top. Will the sponsors be able to send everyone back their money in exchange for precious metals whose prices are falling like a rock?

Also, there is some debate as to whether the ETFs' holdings are fully backed by precious metals. For example, the website for StreetTracks Gold Shares, one of the most popular precious metals ETFs, starts out with a description of gold’s attributes and advantages and then goes on to say that GLD offers “investors an innovative, relatively cost efficient and secure way to access the gold market.” It does not say that you own physical metal. There have been many articles written on this subject and I refer you to the following articles to read for yourselves: "The Paper Game - StreetTracks Gold Shares ETF" and "Can We Trust the Silver ETF?".

Gold ETFs

One of the most popular and fastest growing gold ETFs is "SPDR Gold Shares (NYSE:GLD)", listed on the New York, Singapore, Tokyo and Hong Kong stock exchanges. Other popular gold ETFs include "Gold Bullion Securities (LSE:GBSS)" and "ETFS Physical Gold (LSE:PHGP)", both listed on the London Stock Exchange.

Silver ETFs

The largest, most popular silver ETF is the "Ishares Silver Trust (NYSE:SLV)" on the NYSE. Also, take a look at "ETFS Silver Trust (NYSE:SIVR)" and "ETFS Physical Silver (LSE:PHAG)", which is listed in London.

Platinum ETFs

For platinum try "ETFS Physical Platinum (LSE:PHPT)", listed in London.