If you want to invest in gold unit trusts, here's what to look for…
If you fancy buying gold stocks as you see a recovery coming for the sector or to gain exposure to the gold price, it can be difficult to know which ones to buy.
One way to get around this is to buy into a unit trust that invests in gold stocks for you.
So what should you look at when weighing up different gold unit trusts?
Read on to find out…
The ins and outs of gold unit trusts
Investing in unit trusts focusing on gold mining stocks is a good way to gain exposure without having to research individual stocks yourself.
Along with gold producers, it’s likely you’ll also gain exposure to other precious metals and commodities too.
When looking at different funds, the important thing is to check what you’re getting. You need to check what the allocation to gold is. If you’re looking for exposure to the gold price, it’s vital the fund has a chunk of gold or gold producing assets in it.
Check out the fees charged by different unit trusts
Fees are a big consideration and will impact your returns.
The main thing to pay attention to is a fund’s total expense ratio (TER). This includes its management fees and its operating costs.
The fund manager will give this as a percentage of the total assets under management. By looking at the TER you’ll get an idea of how much fees will impact your returns.
Avoid investing in the most expensive unit trusts. If there are good returns, this might not continue so the higher cost may not be worth it.
So there you have it. What to look for if you want to invest in gold unit trusts.
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