Separate to the discussion on why to invest in gold, is the question of how.
Note that for the purpose of this article, we are excluding gold miners from the equation, as although they are exposed to the gold price, they do not mimic the return on gold itself, with a range of factors that can lead them to outperform, or underperform the precious metal.
While physical bars and coins which people self-store (for example at home) will forever remain an important part of the overall gold market, they are less popular with SMSF trustees for a number of reasons, including the fact they are typically more expensive to buy and sell.
For this reason, SMSF trustees tend to invest in gold via:
A depository account like The Perth Mint’s Depository Online option
This is similar to a share trading account, but instead it is used to buy and sell gold and other precious metals which are held in custody by The Perth Mint on behalf of investors.
As an example, The Perth Mint Depository Online option allows SMSF trustees to trade 24/7 without the worry of having to store the metal themselves.
Valuations can also be provided to facilitate the reporting requirements SMSF trustees must adhere to.
A gold ETF like Perth Mint Gold (ASX:PMGOLD)
Bought and sold like regular shares via a stockbroker or online trading account, gold ETFs are becoming the most popular way for SMSF trustees to invest in gold.
Gold ETFs also tend to be the lowest cost way of accessing gold, with trading spreads that are cheaper than buying bars or coins. Management fees are also very competitive. As an example, ASX:PMGOLD has a management fee of just 0.15%.
Gold ETFs are arguably the easiest way for SMSF trustees to invest in gold, given the vast majority already own shares and can therefore make an investment out of their existing brokerage account.
For a more detailed read on the key reasons why investors like SMSF trustees are turning to gold, please access our latest SMSF investment whitepaper.