Which gold ETF holds real gold?

The physically backed funds do: GLD, IAU, GLDM, SGOL, BAR and AAAU are trusts that hold gold bullion with a custodian and publish lists of the bars. Miners funds hold company shares, and the leveraged funds hold futures, swaps and cash. Read the prospectus to see where the gold is kept and how it is audited.

Are gold ETFs taxed like stocks?

Physically backed gold trusts are treated as holdings of a collectible, so the IRS taxes long-term gains on them at the collectibles rate, which can reach 28%. Miners funds hold stocks and are generally taxed like other stock funds. Situations differ, so check the fund's tax information and your own return.

Can I hold a leveraged gold ETF for months?

You can, although the fund targets its multiple for one day at a time. Over longer periods its result can drift well away from two times gold's move, especially when gold swings back and forth, because each day's gain or loss compounds on a new base.

Gold ETFs Compared: Bullion Trusts, Miner Funds and Leveraged Gold

Q: Gold ETFs Compared: Bullion Trusts, Miner Funds and Leveraged Gold

Gold ETFs split by design. Physically backed funds such as GLD, IAU, GLDM, SGOL, BAR and AAAU hold bullion in vaults; miners funds such as GDX, GDXJ and RING hold mining company shares; and leveraged funds such as UGL, GLL, NUGT and DUST target a multiple of a daily move.

A gold miners fund holds mining companies. Their shares rise and fall with the gold price, and also with fuel costs, labor, the grade of ore in the ground, debt, and the stock market’s mood that week. Gold can be flat on a day stocks sell off hard. The miners fund drops. The bullion fund barely moves, and an investor who owned both as “gold” learns that the portfolio was carrying stock market risk in a place it never expected to find any.

Tickers and sponsors appear below as the funds name themselves. Sponsor names change after mergers and rebrands. For the current name, the price, the expense ratio and the asset figure, use each fund’s own page, which updates them daily.

Physically backed gold funds

These are trusts. Each share is a fractional interest in gold bars held by a custodian, and because the trust sells a little gold to pay its expenses, the amount of gold behind each share shrinks slowly year after year.

Ticker	Fund	What it holds	Design
GLD	SPDR Gold Shares	Gold bullion in a custodian’s vault	Grantor trust; shares created and redeemed in large blocks by authorized participants
IAU	iShares Gold Trust	Gold bullion in a custodian’s vault	Grantor trust; each share represents less gold than a GLD share
GLDM	SPDR Gold MiniShares	Gold bullion in a custodian’s vault	Grantor trust with a small amount of gold per share
SGOL	abrdn Gold ETF Trust	Allocated gold bullion	Grantor trust holding specific, identified bars
BAR	GraniteShares Gold Trust	Gold bullion in a custodian’s vault	Grantor trust
AAAU	Goldman Sachs Physical Gold ETF	Gold bullion in a custodian’s vault	Grantor trust

They track the gold price minus expenses. The gap between the two is what tracking error measures.

Gold miners funds

Ticker	Fund	What it holds	Design
GDX	VanEck Gold Miners ETF	Shares of large and mid-sized gold mining companies worldwide	Index fund, market-cap weighted
GDXJ	VanEck Junior Gold Miners ETF	Shares of smaller gold and silver miners and explorers	Index fund, market-cap weighted
RING	iShares MSCI Global Gold Miners ETF	Shares of companies whose main business is gold mining	Index fund

Miners carry operating leverage. Suppose pulling an ounce out of the ground costs a mining company a fixed amount: a rise in the gold price then lifts its profit by a larger percentage than the price rise itself, and a fall squeezes profit just as hard, which is why miners funds tend to swing further than bullion in both directions. Juniors add financing and project risk. The gold ETFs or gold miners strategy weighs the two for a swing or a longer hold.

Leveraged and inverse gold funds

Ticker	Fund	What it holds	Design
UGL	ProShares Ultra Gold	Gold futures, swaps and cash	Targets 2x the daily move of a gold index
GLL	ProShares UltraShort Gold	Gold futures, swaps and cash	Targets -2x the daily move of a gold index
NUGT	Direxion Daily Gold Miners Index Bull 2X	Swaps and shares tied to a gold miners index	Targets 2x the daily move of that index
DUST	Direxion Daily Gold Miners Index Bear 2X	Swaps tied to a gold miners index	Targets -2x the daily move of that index

Every one of these resets each day. Held longer, the fund compounds on a new base every session, and in a market that chops up and down the result falls behind the multiple you expected, a drag known as volatility decay that grows with the size of the swings and the length of the hold. The leveraged ETF decay calculator shows the gap for any path you enter.

How do you choose between bullion funds?

The bullion trusts all hold the same metal. They differ in cost and plumbing.

Expense ratio. The yearly fee is paid by selling gold, and on a long hold it is the main difference between funds.
Liquidity and bid-ask spread. Heavy trading usually means a tighter spread.
Share price. Some trusts hold less gold per share, so one share costs less, which helps if you buy in small amounts.
Custody and audit. Read whether the bars are allocated to the trust, where they are vaulted, how often the holdings are counted and by whom, and whether the trust publishes its bar list, all of which the prospectus and the fund’s site should state plainly.

A frequent trader cares most about the spread. Someone buying once and holding for a decade cares most about the fee.

How are gold ETFs taxed?

The IRS treats a physically backed trust as a collectible. Long-term gains are taxed at the collectibles rate of up to 28%. Miners funds are ordinary stock funds. Leveraged funds built on futures can have their own tax treatment and may issue a Schedule K-1, so read the fund’s tax page before you buy. Situations differ; a tax professional can say how any of this applies to your return. The ETFs topic page has related definitions and strategies.