Gold ETF Fee War Gets Complicated

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
ppbob
Junior Member
Junior Member
Posts: 10
Joined: Wed Aug 31, 2016 4:24 pm

Gold ETF Fee War Gets Complicated

Post by ppbob » Wed May 01, 2019 12:38 pm

Interesting article but mostly about fees and bid/ask spread

But notes that
Over the past 12 months, for example, GLD saw outflows of $2.7 billion. Meanwhile, all other gold ETFs combined saw net inflows of $2.3 billion.
https://www.etf.com/publications/etfr/g ... nopaging=1

Bob
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 617
Joined: Tue Dec 18, 2012 6:35 pm

Re: Gold ETF Fee War Gets Complicated

Post by I Shrugged » Wed May 01, 2019 2:03 pm

Good find. Thanks!
boglerdude
Executive Member
Executive Member
Posts: 418
Joined: Wed Aug 10, 2016 1:40 am

Re: Gold ETF Fee War Gets Complicated

Post by boglerdude » Thu May 02, 2019 2:22 am

So why wouldnt I go with https://www.etf.com/AAAU

.18% and government backed
pmward
Executive Member
Executive Member
Posts: 458
Joined: Thu Jan 24, 2019 4:39 pm

Re: Gold ETF Fee War Gets Complicated

Post by pmward » Thu May 02, 2019 11:12 am

boglerdude wrote:
Thu May 02, 2019 2:22 am
So why wouldnt I go with https://www.etf.com/AAAU

.18% and government backed
If you're buying for the long term than it really doesn't matter what you choose. Just pick whatever is safe and has the lowest rate possible. The higher ER rate ETF's are meant for short term traders. Spread is a much, much larger penalty to them than ER. Also, they generally tend to need to get in and out of large positions quickly. So paying a little extra ER for lower spread and higher liquidity is a no brainer. But this is pretty much a non-issue for someone that is holding for long periods of time.
User avatar
sophie
Executive Member
Executive Member
Posts: 3212
Joined: Mon Apr 23, 2012 7:15 pm

Re: Gold ETF Fee War Gets Complicated

Post by sophie » Thu May 02, 2019 12:04 pm

It certainly matters if you're holding for a long period of time. The difference between IAU and AAAU is $7 per year, per $10,000 invested. It's more for GLD, SGOL etc. It's so easy to switch (at least in a tax-advantaged account) that it's kind of a no brainer to take advantage of this.
pmward
Executive Member
Executive Member
Posts: 458
Joined: Thu Jan 24, 2019 4:39 pm

Re: Gold ETF Fee War Gets Complicated

Post by pmward » Thu May 02, 2019 12:10 pm

sophie wrote:
Thu May 02, 2019 12:04 pm
It certainly matters if you're holding for a long period of time. The difference between IAU and AAAU is $7 per year, per $10,000 invested. It's more for GLD, SGOL etc. It's so easy to switch (at least in a tax-advantaged account) that it's kind of a no brainer to take advantage of this.
Sorry, when I said it "doesn't matter" I meant that the spread and liquidity difference doesn't matter for a long term investor and that the safety and ER are what matters. For a short term hold the opposite would be true. I didn't provide enough context there.

General recommendations (commissions are not considered here, and should be considered at least for DCA accumulations):
Long term hold - SGOL, GLDM, or AAAU
Medium term hold - IAU (fits perfectly in the middle on liquidity, spread, and expenses)
Short term hold (day trader, swing trader, etc) - GLD
User avatar
jhogue
Executive Member
Executive Member
Posts: 372
Joined: Wed Jun 28, 2017 10:47 am

Re: Gold ETF Fee War Gets Complicated

Post by jhogue » Thu May 02, 2019 12:49 pm

I picked SGOL as an ETF for my tax deferred account largely because it offered geopolitical diversification. (They hold their gold in vaults in Switzerland).
It has been a nice bonus to see that they have cut their ER to compete with other gold ETFs. For buy-and-hold-investors, I think it will make a positive difference.
Last edited by jhogue on Thu May 02, 2019 1:52 pm, edited 4 times in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
pmward
Executive Member
Executive Member
Posts: 458
Joined: Thu Jan 24, 2019 4:39 pm

Re: Gold ETF Fee War Gets Complicated

Post by pmward » Thu May 02, 2019 12:56 pm

jhogue wrote:
Thu May 02, 2019 12:49 pm
I picked SGOL as an ETF for my tax deferred account largely because it offered geopolitical diversification. (They hold their gold in vaults in Switzerland).
It has been a nice bonus to see that they have cut their ER to compete with other gold ETFs. For buy-and-hold-investors, I think it will make a positive difference.
AAAU is the same there as it is located at the Perth Mint and fully guaranteed by the government, and also has a cool perk that it allows for exchange in kind via delivery or in person pick up (it would be interesting to know if these could be swapped over to their other programs in kind). I'm not sure if SGOL has the same in kind exchange feature, google did not bring anything up. Would be interesting to know that.
User avatar
jhogue
Executive Member
Executive Member
Posts: 372
Joined: Wed Jun 28, 2017 10:47 am

Re: Gold ETF Fee War Gets Complicated

Post by jhogue » Thu May 02, 2019 1:31 pm

It has been over 4 years since I read the prospectus and made my initial purchase of SGOL-- so I may not be current-- but I am pretty sure that SGOL did not offer an in-person physical conversion capability when I first bought in. That would certainly be a useful option, but would probably come at an additional cost.

PS: My thanks to ppbob for finding and posting the link to this article. On re-reading it, I am impressed to see how the ETF industry has responded in the past few years with a variety of gold ETFs that meet the different needs of investors. It reminds me of discussions on this forum of the many different ways of holding physical gold.
Last edited by jhogue on Thu May 02, 2019 1:52 pm, edited 1 time in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
User avatar
ochotona
Executive Member
Executive Member
Posts: 2879
Joined: Fri Jan 30, 2015 5:54 am

Re: Gold ETF Fee War Gets Complicated

Post by ochotona » Thu May 02, 2019 1:52 pm

GLD, GLDM - in London
IAU - London, New York, Toronto
User avatar
Kbg
Executive Member
Executive Member
Posts: 1400
Joined: Fri May 23, 2014 4:18 pm

Re: Gold ETF Fee War Gets Complicated

Post by Kbg » Thu May 02, 2019 4:52 pm

I read the article when it came out and have forgotten the specifics...but I was quite surprised at the company that set their rate at .179 (or whatever) because they knew the .009 wouldn't show up in most websites. On one level I thought what a bunch of kaka. On another I though, wow, that's some deep research, I'm impressed.
Post Reply