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Australia Investing
5 Biggest ASX Precious Metal ETFs in 2023
Oct. 17, 2023 01:50PM PST
Precious metals ETFs are a way for investors to get exposure to commodities like gold and silver without owning the physical metal. Learn about the top five listed on the ASX.
kenary820 / Shutterstock
Precious metals have long been considered a way for investors to diversify their portfolios.
For investment purposes, they have low or negative correlations with the stock and bond markets, reducing risk and offering protection against volatility. On the inflation side, these metals have intrinsic value that is not tied to economic growth, are tangible assets that don’t carry a credit risk and are in limited supply.
But investing in precious metals as bullion can be a cumbersome process — not everyone has a place to store physical metal, and paying for storage can eat into profit value. Holding actual metal may also not provide enough liquidity.
For this reason, many market participants turn to vehicles like precious metals exchange-traded funds (ETFs). These convenient products provide exposure to precious metals without the need to physically store and own the commodities.
Here’s a quick look at the five largest precious metals ETFs on the ASX by assets under management as of September 11, 2023. Read on to learn more about them and if they could be a fit for your portfolio.
1. Global X Physical Gold (ASX:GOLD)
Assets under management: AU$2.68 billion; year-to-date fund return: 18.4 percent; current share price: AU$27.71
Previously known as ETFS Physical Gold, this is the largest precious metal fund by a wide margin, and also one of the oldest. Admitted to the exchange in 2003, this fund provides a return equal to the price movement of the Australian dollar price of gold (with a 0.4 percent management fee per annum). The fund is backed by bullion held by JP Morgan Chase Bank (NYSE:JPM) in London. The fund has had an 8.26 percent return since inception.
2. Perth Mint Gold (ASX:PMGOLD)
Assets under management: AU$700.73 million; year-to-date fund return: 15.93 percent; current share price: AU$29.88
Coming in second is another gold ETF, Perth Mint Gold. The fund, managed by the Australian government’s Perth Mint, is an option for investors who like the appeal of buying government-backed gold. Investment is also underpinned by the Perth Mint’s bullion bars and is physically redeemable. The fund has the lowest management fee of all gold ETPs on the ASX, coming in at just 0.15 percent. The fund has an 8.43 percent annualised return since inception.
3. BetaShares Gold Bullion ETF (ASX:QAU)
Assets under management: AU$467.8 million; year-to-date fund return: 10.27 percent; current share price: AU$16.36
BetaShares has a long history of managing ETFs on the ASX, and its gold bullion ETF is just one of the more than 60 ETFs the company runs. The company is an Australia-based and operated ETF provider. Its gold ETF was launched in 2011 and has had an annual return of 1.25 percent since inception. The fund’s physical bullion is also held by JPMorgan in London and it has a 0.59 percent management fee.
4. Global X Physical Silver (ASX:ETPMAG)
Assets under management: AU$261.65 million; year-to-date fund return: 29.58 percent; current share price: AU$33.41
Sister to Global X Physical Gold, Global X Physical Silver has many of the same features with a smaller size. Backed by physical silver held by JP Morgan Chase Bank in London, this fund also has a slightly higher management fee at 0.49 percent per annum. Global X Physical Silver has logged a 5.3 percent return since inception.
5. Global X Precious Metals Basket (ASX:ETPMPM)
Assets under management: AU$58.81 million; year-to-date fund return: 2.54 percent; current price: AU$200.54
Global X has a diversified precious metals basket for those investors who don’t want to have exposure to just a single metal. This fund offers returns from four precious metals: gold, silver, platinum and palladium, with physical assets held by JPMorgan in London. Each unit of the ETF comes with an entitled amount of physical bullion, and the management fee is paid depending on the entitlement. The fee ranges from 0 percent per annum for gold to 0.49 percent for silver, platinum and palladium.
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Securities Disclosure: I, Matthew Flood, currently hold no direct investment interest in any company mentioned in this article.
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Matthew Flood is a writer and editor from Montreal, Canada. He's been writing professionally for four years on a wide array of topics ranging from investments and real estate to cookware and home improvement. Matt also enjoys creative writing and has written two novels and a novella.
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Matthew Flood is a writer and editor from Montreal, Canada. He's been writing professionally for four years on a wide array of topics ranging from investments and real estate to cookware and home improvement. Matt also enjoys creative writing and has written two novels and a novella.
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