Hello folks !
Everyone is VT on IB, but what about Gold ?
May you recommand a Gold ETF on IB ? which one ?
The one I found were linked to fees (few CHF) which not apply on VT
Thank you for your support !
Everyone’s riding the VT train but gold’s like the quiet kid in class who always aces the test. Try IAU or GLDM since they have small fees with big chill energy
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Thanks !
Another thing, why do we have to use IBKR UK in Switzerland ? instead of the other version (IE ?) of IBKR ?
Probably a corporate decision of IB
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Always? Like from '95 to '05, or from '12 to '20?
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I switched from IAU to SGOL
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And IE is in the EU, UK isn’t anymore. Guess there are some regulatory reasons or reporting requirements behind that decision, so they moved EU customers to an EU branch when it was opened, but kept CH customers with the UK one.
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WHat’s your view of IAUI?
This is a gold etf which has a higher TER (0.79% vs. 0.25% for IAU) but layers option writing on top which results in a 11-12% distribution yield (monthly distributions). You can also write options (e.g. Puts) on it. I’m considering doing that.
I’ve held physical gold (home, in a vault) and am fine with that (a kind of emergency stash) but it’s not generating a return when it’s just sitting there. I am thinking of writing puts on IAUI… if I don’t take delivery, fine, collect the premium. If I do need to take delivery… also fine, get the 11-12% yield and perhaps write a call.
I’ve never heard of it before but I had a quick look.
Comparing IAU and IAUI over a one-year time frame it looks like plain IAU outperformed IAUI (including dividends). That includes periods of strong gold price appreciation and depreciation (high volatility).
Over the last six months IAUI seems to have slightly outperformed (only with dividends factored in of course) IAU. I also quickly gave it to an LLM to pull the actual dividend distributions and here’s some excerpts which I found interesting:
This is for last 6 months:
| Metric | IAUI | IAU | Difference |
|---|---|---|---|
| Starting Investment | $100.00 | $100.00 | — |
| Ending Market Value | $81.97 | $85.50 | IAU +$3.53 |
| Dividends Received | $5.40 | $0.00 | IAUI +$5.40 |
| Total Ending Value | $87.37 | $85.50 | IAUI +$1.87 |
| Total Return | -12.63% | -14.50% | IAUI +1.87 pp |
| TER (annual) | 0.79% | 0.25% | IAUI costs 0.54% more/yr |
| TER Impact (6 months) | ~0.395% | ~0.125% | ~0.27% drag on IAUI |
The proclaimed 11.79% distribution rate overstates true income. The actual 6-month distributions of $3.3727/share annualize to ~10.8% on the starting price — close but below the headline rate.
Particularly interesting for us in Switzerland is that the distributions are largely Return of capital. So one could hope that it’s not all counted as dividend income - similar to when you would write options yourself.
More importantly, 80–87% of distributions are Return of Capital, meaning much of the “income” is the fund returning your own money, not genuine yield. This erodes NAV over time.
I don’t necessarily agree with the NAV erosion part being true - but I’m not sure.
For me the vehicle is not really that interesting, I think of Gold more in “weight” and I use the ETFs to save money for a few months until a purchase of physical makes sense (I don’t want to end up selling physical due to poor liquidity management and lose money with the bid/ask spreads). But that’s more for subjective reasons and my piece of mind then for optimizing returns.
Thanks for your thoughtful response.
I wasn’t intending to buy the ETF but rather to write (cash covered) put options on it to generate income. If I then wind up taking delivery, I’d still get a nice yield.
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