## Want to invest in gold? How to choose between Taiwan Gold ETF and US Gold ETF

As a traditional safe-haven asset, gold attracts more and more investors. But how can you enter the gold market safely and conveniently? **Gold ETFs** offer a relatively accessible solution, allowing you to start investing with just a few hundred dollars without purchasing physical gold bars.

This article will introduce you to the core knowledge, investment methods, and popular products in the Taiwan and US markets from a practical perspective.

## Why invest in Gold ETFs? Five core advantages

**1. Easy trading, buy and sell anytime**

Gold ETFs are listed and traded on stock exchanges just like stocks. Simply open your brokerage app to place an order. Unlike buying physical gold, which requires going through banks or financial institutions and worrying about authenticity, the process is simple and transparent.

**2. Much lower costs than physical gold**

Handling fees for buying gold bars can be as high as 5%~10%, plus storage costs. Gold ETFs have management fees of only 0.2%~0.5%, offering a clear cost advantage. Even compared to futures, it saves the high margin requirements.

**3. A tool for risk diversification**

Gold has low correlation with stocks and bonds. Adding 5%~10% of gold assets to your portfolio can hedge against inflation and act as a buffer during stock market downturns. Studies show that a proper allocation of gold can improve overall investment returns.

**4. Accessible to everyone**

Physical gold often requires a minimum investment of several tens of thousands of dollars, discouraging small investors. Gold ETFs break this barrier, allowing participation with just a few hundred dollars, greatly lowering entry barriers to the gold market.

**5. Transparent information, peace of mind**

Spot gold ETFs regularly disclose their gold reserves, so investors can clearly see how much physical assets support the fund. Other types of gold ETFs also provide detailed disclosures of their holdings and trading strategies.

## What types of Gold ETFs are there?

Gold ETFs are mainly divided into three categories based on their tracking targets:

**Physical Gold ETFs**: Directly hold physical gold stored by professional custodians. Investors indirectly own the corresponding gold shares. Representative products include GLD (SPDR Gold ETF).

**Derivative Gold ETFs**: Track gold prices by investing in gold futures or contracts for difference (CFDs). Some derivative ETFs also have leverage (e.g., 2x long or inverse), which carries higher risk and is suitable for advanced investors.

**Gold Mining Stock ETFs**: Hold a portfolio of stocks of gold mining companies, indirectly benefiting from rising gold prices. These ETFs tend to be more volatile because they are affected not only by gold prices but also by stock market trends and company operations.

## How do Gold ETFs perform in terms of volatility and liquidity?

As a safe-haven asset, gold prices are relatively stable. Historical data shows that over the past five years, gold's volatility has been significantly lower than that of oil, copper, government bonds, and stock indices.

However, during certain periods—such as increased economic uncertainty, shifts in monetary policy, or geopolitical events—gold prices can experience notable fluctuations. These moments can be opportunities to buy gold ETFs—many investors are optimistic about further price increases in the coming years, especially as global central banks continue to increase gold reserves, supporting higher prices.

In comparison, gold mining ETFs tend to be more volatile because they are also influenced by mining costs, industry risks, and company management.

## Gold ETF vs. Gold CFDs, which is more cost-effective?

| Item | Gold ETF | Gold CFD |
|------|------------|----------|
| Margin | No margin required | 0.5%~100% adjustable |
| Trading costs | Management and custody fees | No commission |
| Holding costs | No overnight fee | Overnight financing fee |
| Suitable for | Medium to long-term investors | Short-term traders |
| Risk features | No leverage | Leverage included |

**Simple judgment**: If you want to hold gold assets steadily for over 3 years, gold ETFs are the best choice. If you aim to profit from short-term price fluctuations and have experience with leverage tools, then gold CFDs can be considered.

## How to scientifically invest in Gold ETFs? Three practical strategies

**Strategy 1: Allocate based on risk preference**

- **Aggressive investors**: Stock index ETF 50% + Gold ETF 25% + Bonds 20% + Others 5%
- **Balanced investors**: Bonds 42% + Stock index ETF 30% + Gold ETF 25% + Others 3%
- **Conservative investors**: Bank deposits 40% + Bonds 30% + Stock ETF 15% + Gold ETF 15%

**Strategy 2: Regular fixed investment to smooth costs**

Choose a fixed date each month (e.g., payday) to buy a fixed amount of gold ETF. This allows you to buy less when prices are high and more when prices are low, averaging costs over time and reducing market volatility impact. Patience is key—recommend holding for at least 3~5 years.

**Strategy 3: Active timing, buy low and sell high**

For more experienced investors, adjust your purchase volume based on gold ETF price movements—buy more at lows, less at highs. Set reasonable profit targets, typically 30%~50%. Once achieved, consider selling in parts to lock in gains.

## Recommendations for Taiwan Gold ETFs vs. US Gold ETFs

**Taiwan Market Gold ETFs:**

- **Yuanta S&P Gold ETF**: AUM of $2.55 billion, the largest in Taiwan, with high liquidity, management fee 1.15%, 5-year return 34.17%, ideal for beginners.
- **Futures Yuanta S&P Gold 2x ETF**: Leverage of 2x, 5-year return 70.40%, suitable for advanced investors; not recommended for beginners.
- **Inverse Futures Yuanta S&P Gold ETF**: Tracks inversely, used for arbitrage or hedging, not suitable for general investors.

**US Market Gold ETFs:**

- **GLD (SPDR Gold Shares)**: The largest gold ETF globally, with assets of $56 billion, management fee 0.40%, 5-year return 62.50%, with excellent liquidity—can be traded quickly at any time.
- **IAU (iShares Gold Trust)**: $26.7 billion in assets, management fee only 0.25%, 5-year return 63.69%, less known but with the lowest fee, very suitable for long-term holding.
- **SGOL (SPDR Gold Shares Physical Gold ETF)**: $2.83 billion, offers physical redemption options, relatively lower risk, but average liquidity.

**Key comparison**: US gold ETFs outperform Taiwan products in asset size, liquidity, returns, and risk management. If you are open to international investing, US products are a more stable choice.

## Three key criteria for choosing a Gold ETF

**1. Look at the issuer and asset size**

Prioritize ETFs issued by reputable large financial institutions. Larger assets usually mean higher liquidity and better risk resilience. Small-scale ETFs may face liquidation risks.

**2. Review historical performance and tracking target**

Choose ETFs with stable or improving performance over the past 3~5 years. Understand whether they track spot gold prices, futures, or stock indices, and assess if it matches your risk appetite. Avoid products with poor past performance or low liquidity.

**3. Compare management fees and purchase costs**

Management fees range from 0.25% to 1.15%. Over the long term, this difference can significantly impact returns. Buying at lower prices can further reduce costs.

## Summary

Gold ETFs are a convenient way to participate in the gold market—low cost, high liquidity, suitable for medium to long-term investment. Depending on your needs:

- For Taiwan market exposure, **Yuanta S&P Gold ETF** is a good beginner choice.
- For international diversification, **GLD** or **IAU** offer better scale, liquidity, and fee structures.

The key is to understand your risk tolerance, select appropriate products, and adopt strategies like fixed investment or active timing. Persisting with long-term holding allows you to truly benefit from gold’s hedging and appreciation properties.