The Comprehensive Guide to

Passive Income Investing


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How to Become Financially Independent Through Passive Income Investing

What is a Gold Fund?

A gold fund is an exchange-traded fund (ETF) or mutual fund that invests in gold.

How Does a Gold Fund Work?

For example, let's assume that John wants to invest in gold. He can either buy physical gold, or he can buy shares of a gold fund. The gold fund pools investors' funds and invests in physical gold and/or shares of gold miners and gold processors (depending on the fund). The largest gold fund is the SPDR Gold Trust (NYSE: GLD).

Why Does a Gold Fund Matter?

Owning shares of a gold fund is similar to owning gold itself, in theory, and the prices of gold fund shares should correspond to gold prices. Investors often hold shares of gold funds if they're interested in hedging against inflation or currency devaluation.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.