RT Journal Article
SR Electronic
T1 Gold Exchange Traded Funds
JF ETFs and Indexing
FD Institutional Investor Journals
SP 129
OP 135
VO 2007
IS 1
A1 Rhona O'connell
YR 2007
UL http://guides.pm-research.com/content/2007/1/129.abstract
AB Gold is a small market by comparison with equities and bonds, but it is a liquid market, with best estimates putting global trading volume above $40 billion per day. Gold ETFs were created to grant all investors access to gold with the ease of trading an equity share on an exchange, and are a low-cost option for gaining exposure to the market through the use of a standard brokerage account. The first gold ETF was launched in Australia in 2003 with the World Gold Council. All gold ETFs supported by the WGC are 100% backed by the physical metal. Since their inception, the combined value of gold ETFs has grown to more than $13.3 billion, approximately the market capitalization of the average North American gold mining company. Because of gold's qualities as a hedge against the dollar, inflation, and geopolitical tensions, it is considered a safe haven and preserves its value over time. Gold is also a portfolio diversifier and risk management tool because it has no significant correlation with any other asset class.