## US Stock Gold ETF vs. Taiwan Stock Gold ETF: Who Is the Investment First Choice?

Gold, as a traditional safe-haven asset, offers the dual advantages of inflation resistance and risk diversification. Nowadays, investing in gold is no longer limited to physical purchase; **Gold ETFs** allow ordinary investors to easily participate in the gold market through modern fund structures. But faced with a plethora of options in the market, especially the competition between **US stock gold ETFs** and Taiwan stock products, how should one decide?

## Analysis of the Three Main Types of Gold ETFs

Gold ETFs are mainly divided into three categories based on their tracking targets:

**Physical Gold ETFs** directly hold physical gold, stored and custodized by professional institutions. Investors indirectly own an equivalent amount of gold through shares. Typical representatives include GLD and IAU in the US.

**Derivative Gold ETFs** trade gold futures, CFDs, and other instruments, adjusting buy/sell positions according to market conditions. These products offer leverage options and carry higher risk.

**Gold Mining Stock ETFs** track indices of listed mining companies involved in gold exploration and extraction. Due to their stock-like nature, they tend to be the most volatile.

## Why Investing in Gold ETFs Is Superior

Compared to directly buying gold bars or trading futures, gold ETFs have four core advantages:

**Trading Convenience:** Placed through securities trading platforms, just like buying stocks—easy to buy and sell anytime without extra procedures.

**Significantly Lower Costs:** Physical gold involves handling fees of 5%-10% plus storage costs; futures require margin deposits. Gold ETFs typically have management fees of only 0.2%-0.5%, offering clear cost advantages.

**Risk Diversification:** Gold has low correlation with stocks and bonds. Studies show that allocating 5%-10% of a portfolio to gold assets can maintain returns while effectively reducing overall risk.

**High Transparency:** Spot gold ETFs regularly disclose gold reserves, allowing investors to understand asset composition. Other types also reveal portfolio and strategy details.

**Accessible Entry Barriers:** Buying gold bars requires tens of thousands of dollars, while gold ETFs can be purchased for a few hundred dollars or less, greatly lowering market entry difficulty.

## Why US Stock Gold ETFs Are More Competitive

Performance comparison between Taiwan and US gold ETF products shows a clear lead:

**Mainstream US Products:**

- GLD has an asset size of $56.075 billion, tracking international spot gold prices, with a five-year cumulative return of 62.50%, management fee of 0.40%, and the highest liquidity in the industry.

- IAU has $26.683 billion in assets, also tracking spot prices, with a return of 63.69%, and a lower management fee of 0.25%, making it a cost-sensitive investor’s favorite.

- SGOL has $2.83 billion in assets, a return of 64.36%, and a management fee of 0.39%. It offers physical redemption options and has relatively lower risk of loss.

**Taiwan Product Performance:**

- Yuanta S&P Gold ETF is Taiwan’s largest product, with assets of $25.534 million, tracking the S&P Goldman Sachs Gold Excess Return Index, with a five-year return of 34.17% and a management fee of 1.15%.

- Derivative products like Yuanta S&P Gold Bull and Bear ETFs offer leverage but exhibit higher return volatility, making them less suitable for beginners.

**Key Difference:** US gold ETFs lead in asset size, liquidity, management fees, and long-term returns. Especially GLD and IAU, their scale ensures better liquidity and lower fees, reducing hidden costs.

## Volatility Characteristics and Market Liquidity of Gold ETFs

Prices of physical gold-based ETFs closely track spot gold prices. Although gold is considered a safe-haven asset, during periods of economic uncertainty, monetary policy shifts, or geopolitical conflicts, gold prices can experience significant fluctuations.

Historical data shows that gold’s volatility is much lower than commodities like oil and copper, and also lower than stock markets (e.g., S&P 500) and long-term bonds. From 2017 to 2022, gold’s volatility remained low, only rising sharply during extreme conditions like the COVID-19 pandemic.

Mining stock ETFs, affected by gold prices, overall stock market trends, individual company performance, and industry risks, tend to be more volatile and require investors to have higher risk tolerance.

## Key Differences Between Gold ETFs and CFDs

For long-term investors, gold ETFs require no margin, have no time limit on holding, and feature relatively stable costs, making them suitable for medium- to long-term planning. CFDs offer flexible margin configurations from 0.5% to 100%, allowing leverage to amplify gains, but also involve overnight fees and other holding costs, making them more suitable for short-term trading or intraday operations.

The advantage of CFDs lies in leveraged trading, enabling smaller capital to generate larger returns, with flexible short-term strategies across global markets. However, high returns come with high risks.

## Practical Investment Strategies

**Build a Multi-Tiered Portfolio:** Allocate based on risk appetite. For risk-tolerant investors: 50% stock index ETFs, 25% gold ETFs, 20% bonds, 5% derivatives; for neutral: 42% bonds, 30% stock indices, 25% gold, 3% derivatives; for risk-averse: 40% bank deposits, 30% bonds, 15% stock indices, 15% gold.

**Fixed-Amount Dollar-Cost Averaging:** Invest a fixed amount in gold ETFs at regular intervals (e.g., paydays). This automates buying more at lows and less at highs, averaging costs and avoiding market timing. Requires commitment over 3-5 years for effectiveness; avoid frequent trading.

**Active Buy-the-Dip Strategy:** Adjust purchase amounts based on gold ETF price movements—buy more at lows, restrain at highs. This requires some price analysis skills and is more suitable for advanced investors. Set profit targets of 30%-50%, and consider taking profits in stages once targets are reached.

## Key Indicators for Choosing Gold ETFs

**Issuer Credibility and Asset Size:** Prioritize reputable issuers with large-scale products for better liquidity and ease of entry/exit.

**Tracking Target and Historical Performance:** Focus on products with over three years of return data and maximum drawdown info to assess risk. Avoid poorly performing products unless they are significantly undervalued with good prospects, as liquidity may be limited.

**Fee Structure:** Choose lower-cost products within personal risk tolerance to minimize costs from frequent trading.

## Conclusion

Overall, US gold ETFs, with their scale, cost advantages, and liquidity, are more attractive investment options. GLD, as an industry leader, offers unmatched capital capacity and trading depth; IAU appeals to cost-conscious investors with its low fees; SGOL provides physical redemption options for conservative investors.

Regardless of the choice, investors should first assess their risk tolerance, select products and allocations accordingly, and prepare for long-term investment. The value of gold ETFs lies in consistent accumulation, not short-term trading.