Wealth Management

Non-US Gold ETFs

I was recently asked by about gold ETFs, and what I thought about the largest and most liquid ETF, the SPDR Gold Shares, listed in the US under ticker “GLD”, compared with other options for owning gold. This investor was a non-US taxpayer, and so was aware of some of the US estate tax traps for foreigners owning US ETFs, so wanted to know if physical gold might be a better alternative, or whether there might be some good non-US gold ETFs worth considering.

It should be worth noting that I have long believed gold is a relatively poor store of wealth, though when real interest rates fall below -1%, the storage fee on gold seems less and less bad by comparison. While there may be advantages to owning physical gold, I usually only find these advantages worthwhile for the most extreme “survivalists” who fear a collapse of the banking system. If you believe the banking system is sound, but that it is good to own gold because fiat money will be debased, gold ETFs are still one of the easiest ways to add and sell exposure to gold.

Two non-US gold ETFs on my dashboard are:

1. The iShares Physical Gold ETC, by Blackrock, domiciled in Ireland, 0.15%/year expense ratio, traded in USD in London as β€œIGLN”, and also in GBP and EUR: https://www.ishares.com/uk/professional/en/products/258441/ishares-physical-gold-etc-fund

2. The Value Partners Gold ETF, gold held physically at the HK airport vault, 0.4%/year expense ratio, traded here in HK in HKD as β€œ3081″, also in USD and RMB: https://www.valueetf.com.hk/eng/value-gold-etf-(3081-hk/-83081-hk/-9081-hk).html

I remember the big ad campaign back when the latter launched here in 2010 about the gold being physically stored at HK airport, but I don’t see the advantage of paying the extra 0.25%/year unless I really needed something traded here in HK (say, for holding in CCASS).

As far as I know, both of these can be traded on our non-US platforms, Interactive Brokers and Saxo, as well as in private bank accounts.

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