by David Brady
Sprott Money
Exchange Traded Funds, or “ETFs”, in all asset classes have soared in popularity over the years due to their liquidity, convenience, and low cost. They’re simple to trade, and they provide a quick and easy way to create a portfolio compared with having to buy each of the individual underlying assets. With respect to Gold and Silver, GLD and SLV provide an easy and cost-effective way to gain exposure to precious metals. And there’s no need to store anything, which means no vault fees and no risk of theft from your home.
As we say in Ireland, you never get something for nothing, and so it is with ETFs for precious metals. Gold and Silver ETFs, another form of so-called paper gold, are rarely 100% backed by the physical metal. GLD, for example—the biggest, most popular gold ETF—is an investment fund that holds physical gold to back its shares. In other words, it’s a stock, not the actual physical metal.