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A Cheap Gold ETF Joins The $1B Club

ETF Professor

In 2019, no one should need any convincing that advisors and investors love cheap exchange traded funds. Usually, it's a case of “the cheaper, the better.”

What Happened

For the uninitiated, the latest example of cheap works is the SPDR Gold MiniShares Trust (NYSE: GLDM). GLDM, came to market in June as a cost-effective alternative to the SPDR Gold Shares (NYSE: GLD), recently topped $1 billion in assets under management.

Thanks to that low fee and soaring gold prices, GLDM has attracted nearly $520 million in assets, or about half its AUM tally, just this year.

Why It's Important

“Our low-cost gold ETF with a share price hovering around $15, GLDM has resonated with financial advisors, digital advice platforms and buy-and-hold retail investors,” said Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors, in a statement.

With an annual fee of 0.18%, or $18 on a $10,000 investment, GLDM is significantly cheaper than GLD. GLD, the world's largest gold ETF, charges 0.40% per year.

Just two U.S.-listed gold ETFs – the Aberdeen Standard Physical Swiss Gold Shares ETF (NYSE: SGOL) and the Graniteshares Gold Trust (NYSE: BAR) – have lower annual fees than GLDM. Those funds charge 0.17% per year.

What's Next

Considering it's still a fairly new entrant to the gold ETF fray, GLDM's average daily volume of 1.35 million shares is robust, helping keep bid-ask spreads tight and trading costs low for investors.

If there's one knock on GLDM, it's that the fund is not yet optionable. GLD is.

“GLD remains the largest and most liquid gold ETF in the market with approximately $43.2 billion in total net assets and $5.23 billion of net new inflows year-to-date,” according to State Street.

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