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Best Gold Funds UK – Invest with Zero Fees

Gold is respected worldwide as one of the most attractive assets you can own due to its inherent value and diversification benefits.

In this guide, we will analyse the Best Gold Funds UK, discussing each fund’s features and why you should consider implementing them in your investment strategy. We will also provide a step-by-step guide on how you can invest in a gold fund today and start making a return.

Best Gold Funds UK List

The list below highlights ten of the best gold funds UK in 2021. In the following section, we will discuss these funds one by one, analysing their performance and providing insight into crucial factors you need to consider before investing.

  1. SPDR Gold – Overall Best Gold Fund UK – Invest Now
  2. VanEck Vectors Gold Miners ETF – Best Gold Fund UK for Gold Mining Companies – Invest Now
  3. SPDR Gold MiniShares Trust – Best Gold Fund UK with the Lowest Fees – Invest Now
  4. BlackRock Gold and General Fund – Best Gold Fund UK for Dividends
  5. Jupiter Gold and Silver Fund – Best Gold Fund UK for Diversification
  6. LF Ruffer Gold Fund – Best Gold Fund UK for Capital Growth
  7. Ninety One Global Gold I – Best Gold Fund UK for Gradual Long Term Growth
  8. Invesco DB Precious Metals Fund – Best Gold Fund UK for Futures Investing
  9. Aberdeen Standard Gold ETF Trust – Best Gold Fund UK to Hedge Your Portfolio
  10. ProShares Ultra Gold – Best Gold Fund UK for High Returns

Best Gold Funds to Invest in Reviewed

Whether you are wondering how to invest £500 or you are looking to invest a lot more, it’s always a good idea to weigh up all of your options to make an informed decision. There are numerous to choose from when it comes to gold funds, so deciding which one is best for you can seem daunting.

However, this guide will make the process easier for you by discussing ten of the best gold funds you can invest in. Each fund will be discussed in detail, touching on past performance and highlighting potential investment benefits.

1. SPDR Gold – Overall Best Gold Fund UK

One of the top gold funds in the world is the SPDR Gold ETF. Currently the largest physically-backed gold ETF globally, the SPDR Gold is a favourite of both retail and professional investors across the globe. This exchange-traded fund tracks the performance of gold bullion, giving investors exposure to the price of gold and all of the benefits that accompany this, including hedging and diversification benefits.

Gold

With a low-cost expense ratio of only 0.4%, the SPDR Gold is also popular due to its cost-effectiveness. Furthermore, performance-wise it is also an attractive investment; in 2020, the fund returned 23.68% to investors and returned 18.36% to investors in 2019. So, if you are someone who is looking for an inexpensive gold fund that displays excellent performance, this one might be for you. What’s more, you can invest in the SPDR Gold with eToro, completely commission-free!

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2. VanEck Vectors Gold Miners ETF – Best Gold Fund UK for Gold Mining Companies

Another innovative way to gain exposure to gold is through investing in gold mining companies. As these companies are inextricably linked to the gold price, investing in them provides indirect exposure to the gold market. The VanEck Vectors Gold Miners ETF is a great way to do this, as it tracks the performance of the NYSE Arca Gold Miners Index, which in turn tracks gold mining companies.

VanEck Vectors Gold Miners ETF best gold funds

This method of gaining exposure has been great for the fund, as it has made positive returns for investors in both 2019 and 2020, returning 40.1% and 23.3%, respectively. Another attractive factor regarding this fund is that it also pays an annual dividend to investors every December. If you are looking to gain exposure to gold mining stocks or firms and gain some passive income in the process, it might be worth investing in this fund. You can do so with eToro, with an investment for as little as $50!

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3. SPDR Gold MiniShares Trust – Best Gold Fund UK with the Lowest Fees

This fund is very similar to its parent fund mentioned earlier, the SPDR Gold ETF. However, a critical difference between that fund and this one is the accessibility factor. The SPDR Gold MiniShares Trust is designed and targeted more towards retail investors who wish to place their capital in a fund over the long term. Thus, the SPDR Gold MiniShares Trust is one of the cheapest gold funds you can invest in, making it a favourite for people who are just dipping their toes into the investing scene.

SPDR Gold MiniShares Trust best gold funds uk

With an expense ratio of only 0.18%, this fund is incredibly cost-effective. If you invested $1000 into this fund, you would only pay $1.80 in fees for the full year; this equates to only £1.30! What’s more, you still get all the benefits of investing in a gold fund with interests in gold bullion, such as hedging against market shocks and diversification benefits. Much like the previous two funds, if you are interested in getting involved, we recommend using eToro as they are an FCA-regulated broker that doesn’t charge any commissions to trade.

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4. BlackRock Gold and General Fund – Best Gold Fund UK for Dividends

This fund is one of BlackRock’s premier gold funds and seeks to invest in equities of firms that derive their income from operations that are related to gold. With smart investments from the fund manager, the BlackRock Gold and General Fund has managed to beat the market by quite a large amount in 2019 and 2020, returning 32.54% and 27.20%, respectively.

BlackRock Gold and General Fund

Although this fund is riskier than others due to the nature of the equities it invests in, it does offer the additional benefit of an annual dividend yield of 0.42%. This is great for investors who are placing large amounts of capital into the fund, providing another stream of income. With exposure to companies located in Canada and the US, this fund is an excellent option for investors who are happy to take on a little more risk in exchange for more returns.

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5. Jupiter Gold and Silver Fund – Best Gold Fund UK for Diversification

The Jupiter Gold and Silver fund is an exciting proposition, as it invests in both physical gold bars and silver bullion, providing exposure to both commodities. It also invests in gold and silver mining companies; therefore, the fund offers a great investment opportunity to people who are interested in investing in gold but also wish to gain exposure to the silver investment market too.

Jupiter Gold and Silver Fund

Due to this best Jupiter fund UK’s considerable investment in the silver market, it displays a negative correlation with a large majority of other assets, meaning it is a fantastic addition to your portfolio thanks to its diversification benefits. Also, the fund steers clear of investing in mining companies that are deemed ‘dangerous’, lessening any geopolitical risk it may be exposed to. Finally, this fund reinvests dividends automatically, making it an accumulation fund; this is great if you are looking to increase your position size over time in a passive manner.

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6. LF Ruffer Gold Fund – Best Gold Fund UK for Capital Growth

If you are looking for capital growth and don’t place too much emphasis on current income, then the LF Ruffer Gold Fund might be your best bet. This fund acts as an accumulation fund, meaning that any dividend/interest income is automatically reinvested into the fund, thereby increasing your overall position. So, if you had a $1000 investment and the fund paid out $10 in income, you would then have your position increased to a total of $1010.

LF Ruffer best Gold Fund uk

With an expense ratio of 1.03%, this fund is slightly higher in terms of fees. However, the fund invests inequities related to the gold mining industry, which can be potentially lucrative. The average yearly return over the past five years has totalled 18.07% each year. With exposure to the Canadian and Australasian mining industries, this firm could also be a great way to diversify your portfolio in a geographic sense.

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7. Ninety One Global Gold I – Best Gold Fund UK for Gradual Long Term Growth

This fund invests in gold-related equities and derivatives, aiming to provide investors with gradual growth over the long term. Unlike other funds, this fund tends to display less volatility in terms of returns, meaning it is a great alternative investment fund for investors with lower risk tolerance.

Ninety One Global Gold I

In addition, a dividend is paid each year to investors with a historic price yield of 0.11%, providing an additional income stream. Furthermore, the fund has displayed consistent positive returns, only experiencing a negative return in one of the previous five years. If you are looking for an accumulation fund with the goal of long-term capital growth, the Ninety One Global Gold I could be a great option.

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8. Invesco DB Precious Metals Fund – Best Gold Fund UK for Futures Investing

If gold-mining equities don’t take your fancy, another option could be investing in the Invesco DB Precious Metals Fund, which focuses on the futures industry. Futures trading is a way to speculate on the ‘future price’ of a commodity (in this instance, gold and silver), so they are great if you have an idea of where the price might go down the line.

Invesco DB Precious Metals Fund

However, futures are inherently volatile, so this fund is designed more for people with higher risk tolerance. The Invesco DB Precious Metals Fund tracks the DBIQ Opt Yield Precious Metals Index’s performance, which is composed of futures contracts based on gold and silver. However, over the past five years, the fund has returned investors an average of 6.24% each year, highlighting its consistency in volatile situations. Although it is currently down 7.25% in the year-to-date, this fund is an interesting proposition for risk-seeking investors and looking to gain exposure to the futures market.

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9. Aberdeen Standard Gold ETF Trust – Best Gold Fund UK to Hedge Your Portfolio

The benefits of exposure to the gold market are numerous, and one of the most prominent is its hedging benefits. When market shocks occur (such as the financial crisis in 2008 or the Coronavirus pandemic), it is always wise to have a hedging asset in your portfolio that can offset potential negative returns. Gold is thought of as one of the best ways to hedge these shocks.

Aberdeen Standard Gold ETF Trust best gold funds

With the Aberdeen Standard Gold ETF Trust, you can invest in a fund that offers a low expense ratio and is physically backed with actual gold. This means that, unlike other ETFs, this fund has tangible gold assets, which boosts its hedging properties. If a market shock should occur, there is every chance that this fund would weather the storm and still provide a reasonable return to investors, making it an attractive prospect.

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10. ProShares Ultra Gold – Best Gold Fund UK for High Returns

The last fund we will discuss is the ProShares Ultra Gold. This fund focuses on daily investment results rather than long-term gains, meaning it is an attractive proposition for investors who want returns quickly. The ProShares Ultra Gold aims to double the return made by its benchmark index, the Bloomberg Gold Subindex.

ProShares Ultra Gold

This fund utilises both leverage and compounding to generate significant returns for investors. Although it has experienced some negative returns over the last quarter, the ProShares Ultra Gold has returned over 30% to investors in 2019 and 2020 and has made returns as large as 57% in 2010! Although this fund is very volatile, if you are happy to take on the risk, it can create large rewards.

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What are Gold Funds?

The logistical difficulties of investing in physical gold bars and gold coins have necessitated new and innovative methods to get exposure to the gold market. One of these methods is gold funds, which are open-ended funds that aim to generate returns through exposure to the gold market. This exposure can come in various ways, such as investing in gold mining companies, investing in gold bullion, or even investing in gold futures contracts.

In terms of performance, the best gold ETFs typically generate their returns based on the relative value of gold at the time. If gold is particularly valuable at a given point (perhaps during a market shock), then gold funds will, in turn, see their performance levels increase. So, even though you are investing in a gold fund, you are indirectly investing in the price of gold at the same time.

Gold funds work in a similar way to other funds, in that you can invest in them through your broker of choice and then earn a return based on the price you opened your position at and the price they increase to. We recommend using eToro to invest in gold funds, as they do not charge any commissions, meaning that all you’ll have to pay is the expense ratio assigned by the fund provider. This typically ranges between 0.25% and 0.75%, although it can be more or less than this depending on the provider.

invest in gold funds etoro

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Different gold funds have different objectives, so you must do your due diligence and evaluate which is best for you. Some funds target professional investors interested in dividends, whilst other funds (such as the SDPR Gold MiniShares Trust) target retail investors who want to gain exposure to the gold market in a cost-effective way. The previous section of this guide highlighted some of the best gold funds UK, so make sure to utilise the discussion within that section to inform your investment decisions.

Why Invest in Gold Funds?

Now that we have examined the best gold funds to invest in, you might be wondering why they are such a valued investment opportunity. There are various reasons for this, which we will discuss in this section.

Firstly, the best gold investment funds offer fantastic hedging benefits, which are essential in the modern financial climate. Gold tends to negatively correlate with other assets, such as equities and bonds, meaning that people will flock to gold in times of turmoil as it is a ‘safe haven’. Gold even negatively correlates with interest rates; if interest rates fall, sentiment towards gold usually turns bullish. This demand for gold will, in turn, push up its price, leading to positive returns for investors in gold funds.

Another reason why you should invest in the best performing gold funds is their accessibility and liquidity benefits. As mentioned, investing in physical gold doesn’t make sense as you would have to store it and transport it around, which would be very challenging. Gold funds allow you to gain exposure to the price of gold without having to hold the physical asset. What’s more, they are highly liquid, so if you decide to exit your investment, it is straightforward due to the market’s inherent liquidity.

gold funds performance

Also, gold funds typically have provided above-average returns to investors. From 2005 to 2020, the price of gold has increased by roughly 330%; this is far higher than the 153% increase in the Dow Jones Industrial Average index over the same period. In addition, the Blackrock Gold and General Fund has showcased market-beating performance multiple times over the past decade; the image above highlights just how well this fund can perform. However, gold is not always a winner; in times of economic booms and rising stock markets, investors tend to move away from gold investments, making the price decrease.

Overall though, if you’re wondering why to invest in gold funds, it can be a fantastic avenue to explore if you are looking to diversify your portfolio and hedge against market shocks. The recent uncertainty caused by the COVID-19 lockdown has made gold a more attractive investment than ever, so many gold funds have experienced positive returns in recent years. Suppose you decide to invest in gold funds UK; in that case, we’d recommend using eToro. Their commission-free pricing structure means you’ll be able to save money when investing, meaning more profits are available for you to utilise how you like.

Best Gold Funds Brokers

It’s now time to discuss the best gold funds brokers that you can use to make your gold funds investments. In this section of the guide, we will analyse two of the best stock brokers, helping you decide which is best for you.

1.    eToro – Invest in Gold Funds with 0% Commission

etoro logo

The first broker we are going to discuss is eToro. Commonly thought of as one of the most popular brokers globally, eToro currently boasts over 20 million users worldwide. One of the main attractions for eToro is that they allow users to invest in various assets and buy shares, including stocks and ETFs, completely commission-free. What’s more, eToro does not charge any ongoing monthly account fees or even any deposit fees.

etoro invest in gold funds

67% of retail investors lose money trading CFDs at this site

So, if you invest in a gold fund with eToro, the only thing you need to pay is the expense ratio that the provider of the fund charges. As mentioned earlier, this is typically pretty small – between 0.25% and 0.75% of your position, although it can differ from these percentages. This means that if you are interested in investing in a gold fund such as the SDPR Gold ETF, you can avoid the majority of fees by investing with eToro.

Also, eToro makes it incredibly easy to open an account with them. Their account opening process can be completed entirely online and takes around 10 minutes. Depositing into your account is straightforward and can be done through various methods, such as credit card, debit card, bank transfer, or e-wallet.

etoro invest in etfs

If you want to add other assets to your portfolio along with your gold fund investment, eToro makes this easy too. You can invest in the best ETFs and trade stocks, all without paying any commission. Finally, eToro is also regulated by the FCA and the FSCS. This means that your money will be protected through the strictest security policies that eToro must adhere to. In addition, the FSCS protects the money in your account (up to £85,000) if eToro was ever to go bankrupt, adding an additional layer of security for you.

Pros:

  • Super user-friendly online trading platform
  • Invest in gold funds without paying any commissions
  • Trade CFDs in the form of stocks, indices, commodities, forex, and more
  • 2,400+ stocks listed on the UK and international markets
  • Deposit funds with a debit/credit card, e-wallet, or UK bank account
  • Ability to copy the trades of other users
  • FCA and FSCS protections

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

67% of retail investors lose money trading CFDs at this site

2.    Plus500 – Commission Free Trading Platform for Gold Fund CFDs

plus500 logo

If eToro doesn’t take your fancy, another broker to consider when trading gold funds is Plus500. The firm is a popular UK broker, offering CFDs on a variety of different assets.

CFD trading works a little differently from investing in the actual asset; instead of owning the asset, you’ll instead own a contract based on the price of the underlying asset. So, with Plus500, you would own a CFD on your chosen gold fund rather than investing in the fund itself.

plus500 invest in gold

72% of retail investor accounts lose money when trading CFDs with this provider.

This is a great way to speculate on an asset’s price, such as a gold fund, without having to actually own it. Another great benefit of Plus500 is that you can use leverage to boost your position – they offer up to 1:5 leverage on ETFs. So, if you invested $200 into a gold fund with Plus500 and applied 5x leverage, your position would equate to $1000!

plus500 invest in etfs

What’s more, Plus500 allows users to trade CFDs without having to pay any commission at all. Furthermore, they are one of the most trustworthy brokers in the UK, being regulated by the FCA. Finally, Plus500 even offers a demo account to practice with; so if you want to get a feel for their platform before trading for real, you can do this.

Pros:

  • Commission-free CFD platform – only pay the spread
  • Thousands of financial instruments across various markets
  • Retail clients can trade gold funds with leverage of up to 1:5
  • You can short-sell a stock CFD if you think its value will go down
  • It takes just minutes to open an account and deposit funds

Cons:

  • More suitable for experienced traders

72% of retail investor accounts lose money when trading CFDs with this provider.

How to Invest in Gold Funds on eToro Tutorial

To wrap up this guide, we will now explain the exact process you need to follow to trade the best gold investment funds. We will use eToro as an example in this section, as they allow users to invest in the best investment funds without paying any commission and also allow users to sign up quickly and easily.

Step 1: Open your account

The first step is to open your account with eToro. You can do this easily through their website or investment app.

etoro sign up

67% of retail investors lose money trading CFDs at this site

To sign up, all your need to provide is a few personal details, an email address, and your National Insurance number. One that’s complete, it’s on to step 2.

Step 2: Verify your identity and address

As mentioned earlier, eToro is an FCA-regulated broker, and as such, they must follow the strictest security guidelines to protect their users. Due to this, you must verify your identity and address before you can trade.

Not to worry, though – this process is incredibly straightforward with eToro and can be completed in minutes. Simply upload proof of ID (a copy of your driver’s license or passport) and proof of address (a copy of a bank statement or utility bill), and then you’re good to go! Verification usually only takes a few minutes, then it’s on to Step 3.

Step 3: Make a Deposit

The next step involves funding your account to make your investment in the best gold fund UK. With eToro, you can make deposits completely free of charge, and you can do this via credit card, debit card, bank transfer, and even various e-wallets.

Step 4: Search for your chosen Gold Fund

For this step, we will use the SPDR Gold as an example. Simply click into the search bar at the top of the screen and type in ‘GLD’ (that’s the ticker used for this fund). Then, click the ‘Trade’ button next to the top result.

etoro invest in gold funds

67% of retail investors lose money trading CFDs at this site

Step 5: Invest in Gold Fund

The final step involves completing your investment. You will be presented with a box similar to the one below; simply enter the amount you wish to invest (minimum of $50), double-check everything is correct, and click the ‘Open Trade’ button.

etoro trade gold funds UK

And that’s it! You are now officially an investor in a gold fund, all without paying any commissions!

Conclusion

In summary, gold funds are an attractive investment for many reasons, not just their potential returns. Their ability to hedge against inflation and deflation, combined with their exceptional diversification benefits, means that gold funds are a favourite of both retail and professional investors worldwide.

If you have decided to take the plunge and invest in a gold fund, our recommended FCA-regulated broker would be eToro. When you invest online, you want to make sure you minimise any fees you have to pay – with eToro, you won’t have to pay a penny in commission when investing in gold funds, meaning more of the potential profits are yours to keep. Also, you can begin investing for as little as $50 (about £36), allowing you to start small and gradually build up your exposure.

eToro – Buy the Best Gold Funds UK with 0% Commission

67% of retail investor accounts lose money when trading CFDs with this provider.

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About Connor Brooke PRO INVESTOR

Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also providing startup consulting to small businesses. Holding a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has extensive knowledge in the investing space, and has also written two theses on mutual funds and the UK market.

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