Closed End Gold Funds Vs. The #1 Gold ETF

Published: June 10, 2013

What's better for owning gold... a closed-end fund or the popular ETF GLD?

 

To answer this we compared GLD, the SPDR Gold Trust ETF, to three closed-end funds:

 

Central Fund (NYSEARCA:CEF)

 

Central GoldTrust (NYSEMKT:GTU)

 

Sprott Gold (NYSEARCA:PHYS)

 

We're aware of structural differences between these closed-end funds and GLD: tax considerations, fees, premium vs. NAV, spreads, country of origin (U.S. or Canada), and trading volume. Some of these differences might pique our interest in the closed-end funds. But what about returns, correlation, and risk? Does choosing a closed-end fund sacrifice returns or increase risk?

 

Let's take a quantitative look at the risk and return differences between these products.


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