Sprott Physical Gold Trust Review

About Sprott Physical Gold Trust (PHYS)

Sprott Physical Gold Trust is an exchange-traded fund (ETF), so ETFs are its main product and what investors trying this asset are looking for. Regardless of that, this company is different from any other exchange-traded investment alternative you have tried in the past because instead of just giving you a paper that says you own gold, it gives you access to actual physical gold bullion, too.

The goal of Sprott Physical Gold Trust is to let people enjoy all the benefits of ETFs while having a tangible connection to their investments. Although this is the main appeal of the company, it’s not the only one.

One of the things people love the most about Sprott Physical Gold Trust is that it’s completely transparent about your long-term holdings and their worth. When people invest in this company, they often think they are buying shares of a company, but the difference is that, in this case, each share they own has physical gold bullion to represent and support it.

The company’s website keeps investors interested in the worth of their holdings are updated on everything they need to know about them. When you go to its main page, you can see the NAV of the gold it offers, its market price, its NAV daily change, the total Oz. of gold it has, the management expense ratio, the total net asset value, and more.

It’s complex to find a company that discloses all this information when you make a direct investment in its products, but this one does, as this trust’s investment objective is to give investors a safe place to get physical gold bullion and manage their portfolio. Many companies say their goal is to help their clients; this one shows it.

Although it’s an exchange-traded investment alternative, Sprott Physical Gold was always meant to hold substantially its assets in gold bullion. Holding physical gold bullion has drawbacks you can’t ignore, but this company does its best to reduce them.

How Does It Work?

In a nutshell, Sprott Physical Gold Trust simplifies the physical gold-owning process to make it compatible with the ETF system. First, the company sets strict purity and security standards and measures to ensure its physical gold bullion is of the best quality available for clients. Once it has it, it stores it in high-security vaults in undisclosed places to the public.

Doing that already addresses one of the main problems of owning physical gold bullion, which is storing it. The company takes care of all that, and its custodian verifies the gold’s authenticity while keeping it safe.

As we mentioned before, in this process, you buy units of the trust that represent a specific amount of gold. This process allows online and offline transactions. Thanks to this, you have the liquidity of ETFs and the tangibility of gold bullion, and that’s the “sweet spot” the company aims to reach.

You can redeem your units for precious metals anytime you want as long as you follow the process stated on the company’s website.

What Are the Company’s Goals and Values?

Apart from all the differences we mentioned about what the company offers, something that helps clients tell it apart from others is its goals and values. Sprott Physical Gold Trust does everything in its hands to be innovative and bring new things to the table. It calls itself patiently persistent, and it has been working for 15 years.

What Other Services Does It Offer?

The main product Sprott Physical Gold offers is gold, which includes ETF and gold bullion, but that’s not the only thing it has. Besides that, this company has asset management services to help clients use equity and debt strategies to reach their investment goals.

Sprott Asset Management LP manages this process, and although it comes from the same company, this team works independently from the others in it. You can ask it to manage public and private investment strategies, such as silver, gold, and uranium.

Apart from what Sprott Asset Management LP offers, you can hire this company for resource financing and wealth management. You would need to contact it directly to get more information about the whole service, though.

Sprott Gold ETF Investment Process

The process to get physical gold bullion from Sprott Gold ETF is simple, as you only need to go to its website and contact the company. This business handles trust units through financial advisors and brokers, so you need to work with them to buy or sell ETFs.

While asset management comes from Sprott Asset Management LP, people looking forward to making a direct investment will have to work with Sprott Global Resource Investments. That’s the company’s team that focuses on holding physical gold bullion.

Requirements

All trust funds will ask you to meet some requirements if you want to make a direct investment through them, and Sprott Physical Gold Trust is not an exception to that. Investors interested in working with this company will need to have a brokerage account and stay ready to make real transactions with securities on major stock exchanges.

Sprott Physical Gold Trust asks for a 0.45% management fee, too. Like other businesses, this company has minimum and maximum investment requirements and restrictions, so you need to know them before trying to get physical gold bullion. Financial advisors can help you adapt your investment strategies to the rules of the trust you are using to buy precious metals.

Performance and Returns of the Trust

The performance of Sprott Physical Gold Bullion and its products has been stable for years, and that lets you know it’s a strong company that won’t fall apart a few months after you start investing in it. Naturally, its returns have had highs and lows, but unlike what most people think, that’s not related to the performance of the trust.

Since it’s a company that works with physical gold bullion, its returns will always depend on the actual value of gold worldwide. If there is a huge demand for gold, its price will go up, and the returns of the company will increase, too. On the other hand, if gold prices go down, the trust returns will likely do the same.

Risk and Considerations

Regardless of the trust you use to invest in gold, doing it will always have a level of risk you’ll need to consider before making any direct investment. External factors, such as global events, new economic policies, and even new actions or policies from entities like the New York Stock Exchange can alter the price of gold and therefore how much people holding physical gold bullion need to invest.

If you work with Sprott Asset Management LP, you’ll learn a lot about this, but if you don’t, you need to be aware of the volatility of the asset. Investors interested in holding physical gold bullion should analyze their risk tolerance, investment goals, and the trust’s prospectus before doing anything.

What About Taxes?

Taxation is something you always have to consider when making a direct investment in any asset, as it will determine how much profit you get from it. The same happens when you invest through an exchange-traded investment alternative, such as Sprott Physical Gold Trust.

Tax-wise, getting money from selling trust units is capital gain, which makes it something taxable. When you hold substantially your assets in gold, the time you hold them will determine the tax rate for your investments. However, this depends on your state’s tax policies.

Since Sprott Physical Gold Trust is a grantor trust, it may offer tax advantages to its investors, whether they are making short-term or long-term holdings. Nonetheless, when you work with a trust, it’s common to see that the trust invests primarily in the long-term holding of physical gold bullion.

What Makes Sprott Physical Gold Different from Other Gold Investment Options?

As you have read throughout this review, Sprott Physical Gold Trust is different from other trusts, and it all comes from the trust’s investment objective, which is to help its investors hold substantially all its assets in physical gold bullion without the inconvenience of storing it themselves. All the company’s features and actions work towards that goal.

Even if you don’t try them, other departments from the same company, such as Sprott Asset Management LP give you a more detailed service on how to optimize your investment strategies to get the most out of physical gold bullion. That being said, these are the key differences between Sprott Physical Gold Trust and other trusts:

Transparency

Investors love to work with Sprott Physical Gold Trust because of how transparent it is about everything. Since this trust updates all its investors on its holdings and performance, they can comfortably track their investments just by going to the company’s main website. It’s difficult to see trusts disclosing the level of information that this one does.

When you hold substantially your assets in physical gold, you depend on gold prices to know how well your investments are doing. Some trusts disclose some information, but not as much as Sprott Physical Gold Trust, which is the reason many prefer it over others that offer different features.

Investment Process

The investment process Sprott Physical Gold Trust uses is very different from the ones other companies apply. In most companies, you only pay for the ETFs you want, and you get them. Here is similar, but you still have to contact the company’s team to enjoy the benefits that come with each investment.

ETF-Physical Gold System

One of the most innovative features Sprott Physical Gold Trust offers is its ETF-physical gold system that allows you to get the main benefits from buying ETFs and physical precious metals. Since the company takes care of the storage process, investors only need to worry about improving their investment strategies and tracking how their long-term holdings do.

Although the units you buy represent an amount of gold, they are still ETFs, which means they are more liquid than other assets. Besides that, the company’s security measures make investors feel safer than they would on other trusts.

Fees

The fees Sprott Physical Gold Trust charges for its services are way lower than the ones other trusts charge, and while many people think that’s not that big of a deal, it is. When you hold substantially your assets in gold, you are already at risk of losing your money, but you don’t only lose the money you invest but also the one you pay on fees.

It feels safer to work with trusts with low fees because even if you make a bad financial move, it will be easier to recover from it and change your investment strategies.

Gold Source

Sprott Physical Gold Trust invests primarily in gold and therefore follows strict purity standards to determine the source of its products. Regardless of how well the features of a trust are, it’s no use to work with it if its gold is of bad quality. However, this company is not responsible and doesn’t track the regular cash distributions of its clients.

Educational Resources

When we said this trust’s investment objective is to help its customers hold substantially their assets in physical gold safely, we meant it. Therefore, its website has many educational resources on how to manage gold prices to optimize your long-term holdings.

What Do Experts Think About Sprott Physical Gold?

Most experts love this company due to how transparent it is and how much it simplifies the whole gold-owning process. You can see that in the testimonials the website shows and its A+ score on the Better Business Bureau (BBB).

What About Its Pricing?

Since you are buying units that represent gold and not gold directly, the money you spend depends on the value of gold and how you want to manage your long-term holdings. Although the trust invests primarily in gold, it also offers silver and uranium ETFs, so they have different prices. As for its fees, they are mostly low.

What Are the Benefits of Investing in Physical Gold Bullion?

Investing in physical gold bullion brings many benefits to the table, which is the reason why people have kept doing it throughout the years. Gold will always be trendy, so it’s always a good moment to benefit from it. These are the key benefits of buying this precious metal:

Diversification

While people nowadays like to invest in other assets, such as cryptocurrencies and mutual funds, investors looking forward to diversifying their portfolio go for precious metals. Gold’s value often stays still when others fall, so it’s an excellent option for the job.

Peace of Mind

The reason not many people like investing in ETFs regardless of their liquidity is that they don’t have access to actual gold but only the “paper” that represents it. People like to have tangible assets they can see and touch, especially amateur investors, and that’s what physical gold bullion gives them.

Safety Net

As mentioned before, the value of gold often stays still or goes up when other assets fall short, so it’s an excellent hedge against inflation. That gives you a safety net for any kind of emergency or financial crisis.

Are There Any Drawbacks to Investing in a Gold ETF?

Investing in gold ETFs, like it happens with other assets, has benefits and drawbacks. As for its benefits, you get more liquidity without the need to store physical gold. However, ETFs are often too complex for amateur investors who don’t truly understand what the whole asset is about or who want to have access to something they can see with their own eyes.

Who Is Sprott Physical Gold for?

Sprott Physical Gold Trust is for people who want to invest in physical gold without going through the hassles of storage. This company offers many benefits to both professional and beginner investors alike. In a nutshell, you will love this trust if you:

Like to have a physical representation of your investments

Care about transparency

Want a liquid asset

Don’t want to worry about storage-related issues

Need other services such as wealth or asset management

Want to focus on gold investments

Is Sprott Physical Gold Trust a Safe Company for Gold Investments?

You don’t have any reason to mistrust this company. It is completely safe, and you can use it for your long-term holdings. The reviews it has on BBB, other review websites, and the testimonials you can see on its website back its reputation, so you don’t have any reason to worry about it.

Bottom Line

Sprott Physical Gold Trust is an ideal option for investors of all kinds interested in getting physical gold bullion, and the way it helps you enjoy the benefits of ETFs is just perfect for anyone looking forward to diversifying their portfolio. The company’s customer support is great, so you can contact it if you have any other questions about the services this trust offers.

You can check out our website if you want to read more reviews like this one. We personally tested what this and other trusts do, so don’t hesitate to check it out.