Wisely investing your money is crucial, and one attractive option to consider this year is precious metals. You’ve probably heard about gold bars or silver coins, but did you know there are mutual funds that focus on these valuable metals?
These funds pool money from many people to invest in things such as gold, silver, and other rare metals. In this article, we’ve rounded up the top five precious metals mutual funds you should keep an eye on.
Moreover, these funds are run by pros who know how to navigate the ups and downs of the precious metals market. Here, you’ll learn how investing in these mutual funds could be smart and how to do it. Therefore, let’s dive in!
What Makes Precious Metals a Smart Investment?
You might be wondering, “Why are precious metals worth considering?” Well, let’s start by saying that investing in things such as gold and silver can be a smart way to protect your money.
Finding Stability When the Market Gets Shaky
Precious metals often hold their value, unlike stocks, which can be super unpredictable. Think of it as a safety net. When the stock market gets shaky, people usually turn to gold, silver, and other metals as safer places for their money.
The Tangible Allure
Another cool thing is that precious metals are real, physical things you can hold in your hand, unlike stocks or bonds. Whether it’s gold bullion or other rare metals, having something physical feels more secure to many people.
Plus, there’s something timeless about these metals. Humans have valued them for thousands of years, and that’s not going to change overnight.
Easy Ways to Invest
However, let’s say you’re not into keeping gold or silver bars in your home. That’s okay! You can still get involved through precious metals ETFs or by investing in mutual funds focusing on metals.
These funds are managed by experts in the precious metals ETF industry who know how to make the most out of these investments.
The Five Best Precious Metals ETFs in 2023
We’ve already talked about why precious metals such as gold and silver are solid choices for investment. Investing in these funds allows you to put your money into various metals without buying them physically.
Let’s look at key factors such as expense ratio, assets under management, and how well they’ve handled market volatility. Here are the best mutual funds in 2023:
1. Franklin Responsibly Sourced Gold ETF (FGLD)
First up on our list is the Franklin Responsibly Sourced Gold ETF, known by its ticker symbol FGLD. This fund stands out for a unique reason: it focuses on responsibly sourced gold.
Hence, not only do you get to invest in precious metals, but you also contribute to ethical mining practices. When it comes to assets under management, this fund is quite strong, showing that a lot of investors trust it.
Here’s where it gets better. The fund follows the London Bullion Market Association’s rules, ensuring the gold is top-notch.
Its expense ratio is also competitive, so you’re not losing a ton of money on fees. This makes FGLD a smart pick in the best precious metals ETFs category.
FGLD provides a good mix, exposing you to gold bullion and mining stocks. Plus, it acts as a viable inflation hedge, protecting your money when living costs increase. This adds variety to your precious metals portfolio and helps balance it out.
Furthermore, this is a great way to dive into the precious metals market for retail investors. Not only does it align with investment objectives, but it also reads the market sentiment well. If you want to add some gold to your investment mix, FGLD deserves your attention.
2. iShares Gold Trust Micro ETF (IAUM)
Next on our radar is the iShares Gold Trust Micro ETF, or IAUM for short. If you’re new to investing in precious metals, this fund could be a great starting point.
With a low expense ratio, it’s cheaper to own, which is good news for your wallet. The assets under management are also quite solid, showing that this is a well-trusted choice among investors.
IAUM focuses mainly on physical gold, so you’re not getting a mix of mining stocks or other precious metals. This can be a good thing if you want a more straightforward investment.
Unlike many other gold ETFs, it sticks to the basics and holds gold bars that follow the London Bullion Market Association guidelines.
Moreover, if you want to gain exposure to the precious metal market, IAUM helps you do just that. It fits right into the best precious metals ETFs category and provides a reliable option for your portfolio. The fund also holds its composure in market volatility, making it a stable choice for those unpredictable moments.
Therefore, if you want to include some dependable gold in your investment mix, IAUM could be the perfect match. It meets most investment objectives without complicating things too much.
3. SPDR S&P Metals & Mining ETF (XME)
Another attractive option to consider is the SPDR S&P Metals & Mining ETF, commonly known as XME. Unlike other precious metals ETFs that focus only on gold or silver, XME offers a broader range.
It invests in mining companies involved in different kinds of ores. This is a big plus if you want to diversify your precious metal investments.
The expense ratio for this fund is pretty average, which means it won’t break your bank to own it. However, its focus on mining companies makes it stand out among the best precious metals ETFs. This gives you a closer look at the source of metals such as gold and silver.
In line with the standards of the London Bullion Market Association, the fund also holds some gold bullion. Nonetheless, it goes beyond this to include other assets, making your investment more varied. XME is a good pick for those who want to dip their toes into the precious metals industry.
Hence, if you’re interested in having both precious metals and mining stocks in your portfolio, XME could be your go-to choice. It offers a balanced mix to meet most investment goals.
4. iShares MSCI Global Metals & Mining Producers ETF (PICK)
Next on our list is iShares MSCI Global Metals & Mining Producers ETF, also known simply as PICK. This fund is unique because it focuses on mining producers from around the world.
Moreover, this gives you an excellent chance to diversify in different types of precious metals across various countries.
The expense ratio for PICK is competitive, making it a good option for those concerned about costs. Regarding precious metals ETFs, PICK ranks among the best, especially if you’re looking at mining producers. It follows the iShares MSCI Global Metals index, which is a big deal in the precious metals world.
Unlike other funds that only hold gold bullion or silver, PICK has a broader selection, including bars and other types of physical metals, giving you a fuller basket of investment options. This fund doesn’t just stick to the silver investable market index but goes beyond to offer a diverse range of assets.
Therefore, if you want a fund that offers more than just gold and silver, PICK might be what you’re looking for. It’s a great way to get a broader view of the precious metals industry.
5. VanEck Rare Earth/Strategic Metals ETF (REMX)
The last fund on our list is the VanEck Rare Earth/Strategic Metals ETF, or REMX. This one differs from the others because it focuses on rare earth and strategic metals, not just gold and silver. That’s exciting if you want to broaden your precious metals ETF choices.
REMX is among the best precious metals ETFs when it comes to investing in less common metals, which can add some spice to your investment mix.
While it doesn’t specifically hold golden bars, it’s a part of the broader world of precious metals investments. Hence, don’t expect it to be like your usual SPDR Gold Shares or iShares Silver Trust.
What’s cool about REMX is that it tracks the MSCI ACWI Select Metals index, which means it includes companies from all over the world that are big players in the rare metals market. Regarding silver ETFs, REMX doesn’t concentrate on that but gives you a broader palette of metals to invest in.
Therefore, if you’re after something a little different with a global reach, REMX could be your pick. It’s a great way to invest in the future of tech and energy, where these rare metals play a significant role.
How to Start Investing in Precious Metals ETFs and Mutual Funds
Ready to dive into the world of precious metals? Here’s a quick guide to get you started.
First things first, you’ll need a brokerage account. This account allows you to invest in ETFs or mutual funds focused on precious metals, such as silver ETFs and iShares Silver Trust.
Once you have an account, do some homework. Look into the different precious metals ETFs available. Each fund has its unique features, so make sure you pick one that fits your needs.
Next, decide how much you want to invest. It can be a small amount to start, but feel free to invest as much as you want.
Finally, make your purchase and keep an eye on your investment. Regularly monitoring it will help you make informed decisions about whether to buy more, sell, or hold.
These are a few simple steps that you need to take to become a new investor in the precious metals market!
The Bottom Line
There you have it—a quick guide to some of the best options if you’re looking to invest in precious metals. You’ve got plenty of options, from silver ETFs that let you invest in the silver market to funds holding actual gold bars.
Remember, investing in a precious metals ETF is just one way to be part of this exciting market. Whatever you choose, the key is to do your research and keep an eye on your investments. Good luck on your journey into the world of precious metals!