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You Are Here: Home > Personal Finance > ISAs > FAQs - Question
Can a Stocks & Shares ISA

be used to invest in Gold

Yes and no. You cannot go and buy physical Gold like Krugerrands but you can buy either Gold mining shares or invest directly in Gold via an ETF (Exchange Traded Fund).

Gold mining shares are not to be recommended for most investors because surprisingly they don't always move the same way as the price of the metal.

Can I buy Gold through my Stocks & Shares ISA
For example, Gold might rise 30% but your mining shares stay flat or even move lower. Mining shares are also incredibly volatile and it is possible for them to rise or fall by 50% or more in a matter of weeks.
Use ETFs to invest in Gold
The easiest, safest and least volatile way to invest in Gold is to buy the physical metal using an ETF.

ETF stands for Exchange Traded Fund which are funds traded on the stockmarket like shares. Buying Gold ETFs is exactly the same procedure as buying shares in any other company, for example, 100 or 1,000 ETFs.

Gold ETFs invest in the physical metal which is stored in bank vaults. As more people buy the Gold ETF, more physical Gold is bought and vice versa. So theoretically by investing in the ETF you own a percentage of the metal stored in the vaults.

The Gold ETF will also be priced directly on the movement of the Gold price. So if Gold were to rise or fall by 10%, the ETF would mimic this price movement.

ETFs are cheap to run

The other advantage to ETFs is that they're cheap to run.

Conventional funds traditionally charge between a 1.5% - 2.5% annual management fee but ETFs charge in the region of 0.15% - 0.75%.

Whereas these savings don't look like much they add up over the years. Saving 1% per year for investors with a long term outlook is a massive advantage.

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