Gold & Silver Part 2: ETF

Gold & Silver Part 2: ETF

March 7, 2019 2 By admin

The first post on gold presented the options to purchase gold and silver as a physical metal to keep at home or at the bank (vault). See here.

Gold as an ETF

It is a lot easier to have a record in your investment account compared to buying the shiny yellow stuff and keeping it in a vault. But the ETF serves a different purpose. Physical gold is your insurance against ANY financial collapse. Most people purchase physical gold and keep it for decades.

Gold on paper means you distrust financial markets and currencies, or you think that gold will rise anyhow, but you still trust the financial system well enough to keep your gold for you in vaults or even to keep your gold entirely on paper.

Largest / well known / European Gold ETFs

ETF SymbolETFPhysical storageTEREurope?ETF domiciletransaction free?Size (Billion)
GLDSPDR Gold SharesUK (London)0.40 %NUSA33
IAUiShares Gold TrustNY, London, Toronto0.25 %NUSA10
SGOL / GZURETFS Physical Swiss GoldSwitzerland0.39 %NJersey1
BARGraniteShares Gold TrustUK (London)0.20 %NUSA0.27
DGLInvesco DB Gold (Futures)NA (Futures)0.78%NUSA0.145
VZLD / PHAUETFS Physical GoldUK (London)0.39 %YJerseyYes!6.15
SGLD / 8PSGInvesco Physical Gold A (EUR)UK (London)0.29 %YIrelandYes!4.27
XAD5db Physical Gold ETC (EUR)UK (London)0.25 %YJersey2.1

There are only three ETF’s which I can purchase as a european. The final choice depends on your preference for a domicile (Jersey or Ireland), the expenses (0.39 % to 0.25 %), and your preference for the largest size.

In case you want to save regularly in an Gold ETF, Degiro broker offers transaction-free purchasing of two of the three ETF’s. In case you do a one-time shot and want to keep the ETF for many years, I would go for the lowest expense rate (db Physical Gold ETC (EUR)).

One note for those who have a broker which allows the USA-domiciled ETF’s (Interactive brokers allows it): beware of potential tax issues! These USA-based funds apply USA taxes, meaning a 28 % tax withheld on the profits of selling. I do not have practical experience with this, but that’s what these funds specs say. You are warned.

Silver ETF’s

ETF SymbolETFPhysical storageTEREurope?ETF domiciletransaction free?Size (Billion)
SLViShares Silver TrustUnclear (@JPMorgan)0.50 %NUSA4.8
VZLC/PHAGETFS Physical SilverUK, NYC0.49 %YJersey0.8
XAD6db Physical Silver ETC (EUR)UK (London)0.40 %YJersey0.071
PHPMETFS Physical PM Basket ETC (EUR)UK (London)0.44%YJerseyYes!0.1
PSLVSprott Physical Silver TrustCanada0.74 %NCanada0.9
SLWSilver WheatonNA (futures)YCayman Islands
SLVOCredit Suisse Silver Shares Covered Call ETNNA (Options)0.65 %NUSA0.022

All store physical silver for you, except for these ‘odd man out’:

  • ETFS Physical PM Basket ETC: this is a basket of Precious Metals (Gold, Silver and Platinum), covered by the physical metals
  • Silver Wheaton: this is called a ‘streaming’ company. It does not keep the silver but actually has contracts with mines. The mines sell the silver and wheaton gets the cash. It also pays a dividend of 1.3 % (as an exception to al the other gold/silver ETF’s, which basically keep the metals and do not earn anything on it).
  • Credit Suisse Silver Shares Covered Call ETN: contains calls on the silver price

Which one to choose as a european / belgian investor?

  • It probably makes sense to go for the lowest – expense fund since the ETF doesn’t add any value except keeping the good stuff for you. So that would be the “db Physical Silver ETC (EUR)” ETF
  • Or, alternatvely I could go for the basket of all good stuff: “ETFS Physical PM Basket ETC (EUR)” which would give me a mix of three precious metals at once, plus free transactions at DeGiro

In the next post I give a listing of gold & silver mines. These offer a leveraged view on holding the physical thing, plus a dividend income.