Important Information

You are visiting the international Vantage Markets website, distinct from the website operated by Vantage Global Prime LLP
( www.vantagemarkets.co.uk ) which is regulated by the Financial Conduct Authority ("FCA").

This website is managed by Vantage Markets' international entities, and it's important to emphasise that they are not subject to regulation by the FCA in the UK. Therefore, you must understand that you will not have the FCA’s protection when investing through this website – for example:

  • You will not be guaranteed Negative Balance Protection
  • You will not be protected by FCA’s leverage restrictions
  • You will not have the right to settle disputes via the Financial Ombudsman Service (FOS)
  • You will not be protected by Financial Services Compensation Scheme (FSCS)
  • Any monies deposited will not be afforded the protection required under the FCA Client Assets Sourcebook. The level of protection for your funds will be determined by the regulations of the relevant local regulator.

If you would like to proceed and visit this website, you acknowledge and confirm the following:

  • 1.The website is owned by Vantage Markets' international entities and not by Vantage Global Prime LLP, which is regulated by the FCA.
  • 2.Vantage Global Limited, or any of the Vantage Markets international entities, are neither based in the UK nor licensed by the FCA.
  • 3.You are accessing the website at your own initiative and have not been solicited by Vantage Global Limited in any way.
  • 4.Investing through this website does not grant you the protections provided by the FCA.
  • 5.Should you choose to invest through this website or with any of the international Vantage Markets entities, you will be subject to the rules and regulations of the relevant international regulatory authorities, not the FCA.

Vantage wants to make it clear that we are duly licensed and authorised to offer the services and financial derivative products listed on our website. Individuals accessing this website and registering a trading account do so entirely of their own volition and without prior solicitation.

By confirming your decision to proceed with entering the website, you hereby affirm that this decision was solely initiated by you, and no solicitation has been made by any Vantage entity.

I confirm my intention to proceed and enter this website Please direct me to the website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom

By providing your email and proceeding to create an account on this website, you acknowledge that you will be opening an account with Vantage Global Limited, regulated by the Vanuatu Financial Services Commission (VFSC), and not the UK Financial Conduct Authority (FCA).

    Please tick all to proceed

  • Please tick the checkbox to proceed
  • Please tick the checkbox to proceed
Proceed Please direct me to website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom.

×

Celebrating 15 Years of Excellence

Find Out More >
Celebrating 15 Years of Excellence
View More
SEARCH
  • All
    Trading
    Platforms
    Academy
    Analysis
    Promotions
    About
  • Search
Keywords
  • Forex Trading
  • Vantage Rewards
  • Trading Fees
  • facebook
  • instagram
  • twitter
  • linkedin
  • youtube
  • tiktok
  • spotify
GLDM ETF: Guide to Trading SPDR Gold MiniShares Trust

TABLE OF CONTENTS

GLDM ETF: Guide to Trading SPDR Gold MiniShares Trust

GLDM ETF: Guide to Trading SPDR Gold MiniShares Trust

Vantage Updated Updated Fri, 2022 October 28 03:19

If you know about ETFs, you may already be aware of multiple examples of gold ETFs. One excellent option to explore is the SPDR Gold Minishares Trust ETF (“GLDM”). 

This article delves into GLDM’s history, its relationship to SPDR Gold Shares (GLD), and how it works. Read on for that and more.

What Is SPDR Gold MiniShares ETF (GLDM)

SPDR Gold MiniShare or GLDM is a US-listed ETF that tracks the price performance of gold bullion after the deduction of operations. GLDM was first listed on the NYSE Arca on 26 June 2018, and is a product launched and managed by the World Gold Council USA Asset Management Company LLC [1].

A share of GLDM represents fractional but undivided and beneficial ownership of the gold bullion deposits held by the ETF. It has a lower price per share, allowing investors with a minimum capital to invest in it.

Short History of GLDM ETF

The SPDR Gold Minishares ETF was launched on 26 June 2018, by the World Gold Council and State Street Global Advisors. Its goal is to offer the lowest total expense ratio among gold ETF products, which allows investors to diversify their risk at the lowest possible cost [2].

The GLDM ETF was the third product launched by WGC and State Street, which also launched the SPDR Gold Shares ETF (GLD) in November 2004 as the first US-traded gold ETF, and the first US ETF backed by a physical asset.

These two companies also launched the SPDR Long Dollar Gold Trust in January 2017 as the first US-listed gold ETF designed to combine long positions in physical gold and long dollar positions against a basket of 6 non-US currencies. This ETF helps investors enjoy potential benefits from gold even when the dollar has a strong market performance.

ICBC Standard Bank in London is the custodian of GLDM’s gold holdings. Each GLDM share represents the price of 1/100th of an ounce of gold, with an expense ratio of 0.18% at launch.

At the time of publication, GLDM had about USD$4.7 billion of assets under management.

How the GLDM ETF Works

As stated above, the SPDR Gold Minishare ETF is a relatively transparent and efficient way to track the price of gold bullion, especially if you’re a buy-and-hold investor. It is a cheaper way of investing in gold compared to other ETFs [3]

Moreover, paying GLDM’s ongoing expenses and trading fees in a secondary market is much cheaper than trading, storing, and insuring gold bullion itself.

For trading GLDM ETF, you’ll now pay an expense ratio of about 0.10%, down from 0.18% at launch. What does that mean? For every USD$10,000 invested in GLDM, you’ll pay a $10 fee to the fund manager [4].

GLDM uses the gold price of the London Bullion Market Association (LBMA) as its benchmark. Moreover, GLDM is structured as a grantor trust, providing investors with a certain degree of tax protection, making it even more efficient for investors.

The Relationship Between GLD and GLDM

There is a direct relationship between GLDM and GLD, which is worth looking at. From what we know, both GLDM and GLD are products of the partnership between the World Gold Council and State Street Global Advisors. Also, both ETFs track LBMA gold prices. 

But are there any noteworthy differences between the two? Let’s explore this further. 

Differences 

  • One GLD share represents the price of 1/10th of an ounce of physical gold. GLDM represents 1/100th. That makes ownership of GLD shares more expensive than GLDM shares
  • GLD has an expense ratio of about 0.40%, compared to GLDM’s 0.10%. You pay lower trust fees buying GLDM shares.
  • GLD has more assets under management, at US$ 49 billion, against GLDM’s US$ 4.74 billion.
  • HSBC bank is the custodian of GLD’s gold. In GLDM’s case, it’s the ICBC Standard Bank.

Due to the identical fundamental nature of both ETFs, their price movements have a strong positive correlation.

GLDM Holdings

GLDM solely holds gold bullion with ICBC Standard Bank in London as the sole custodian. These gold assets are currently worth over USD$ 4.7 billion [5].

Why Trade GLDM? 

What are the potential benefits and risks of trading SPDR Gold Minishares (GLDM) [6]?

Benefits

  • Compared to other gold ETFs, GLDM has one of the lowest expense ratios at just 0.10%
  • GLDM can diversify your portfolio and potentially provide a hedge against inflation
  • In the case of GLDM, you have an interest in the underlying gold bullion
  • GLDM is a cost-effective way to invest in gold.

Risks

  • Sudden price fluctuations can have a material impact on the prices of the ETF shares
  • Selling gold bullion to cover trading expenses at times of low gold prices also hurts the cost of gold.
  • Sale of ETF shares held for more than a year by US investors is subject to federal income tax. 

Where and How to Trade GLDM

Interested in investing in the GLDM ETF CFD? Here’s how to go about it:

1. Find and Choose a Broker

You need a broker to access a trading platform and the ETF markets. Here are some things to look out for when selecting the best broker for your investments:

The ideal broker will be:

  • A user-friendly trading platform with plenty of features and access to multiple global markets
  • Regulated by credible financial authorities such as the FCA, SEBI, SEC or ASIC
  • With clear terms and conditions, transparent trading fee and cost structure
  • Responsive, with multilingual customer support available to you 24/5
  • Outstanding order execution speeds

2. Open a Trading Account or a Demo Account

Once you identify an ideal broker, open a trading account on their platform. Alternatively, start with a demo account and test how it works. You can also simulate demo trades until you understand how it works and master your strategies.

3. Find GLDM

Once you have a strategy that gives you consistent results in your demo account, Find the GLDM ETF on your broker’s platform. Add it to your watchlist.

4. Fund Your Account 

Next is to add real money to your brokerage account. You can do it in several ways, including a debit or credit card, direct bank transfers, or wire transfers. Many brokers accept electronic payments, and you can use accounts like PayPal or Skrill.

5. Evaluate the ETF

Test out the health of GLDM ETF before picking it. Check out the fundamentals of the ETF and ensure it offers maximum exposure to the market movements. 

6. Purchase the ETF

With a funded margin account with your broker, wait for markets to open, and buy the ETF of your choice. 

Trade Commodity ETF CFDs with Vantage Markets

Are you looking to diversify your portfolio with GLDM or other ETFs? Sign up today with Vantage markets and get exposure to multiple ETF CFDs.

References

  1. “SPRD Gold MiniShares Trust-State Street Global Advisors SPDR” https://www.ssga.com/us/en/institutional/etfs/funds/spdr-gold-minishares-trust-gldm Accessed 23 Oct 2022
  2. “World Gold Council and State Street Global Advisors Launch Low-Cost Gold Exchange-Traded Fund – Business Wire” https://www.businesswire.com/news/home/20180626005961/en/World-Gold-Council-and-State-Street-Global-Advisors-Launch-Low-Cost-Gold-Exchange-Traded-Fund Accessed 23 Oct 2022
  3. “7 Best Gold Etfs to Hedge Volatility in 2022 – U.S. News” https://money.usnews.com/investing/funds/slideshows/best-gold-etfs-to-hedge-volatility Accessed 23 Oct 2022
  4. “GLDM, World Gold Trust, SPDR Gold MiniShares Trust – Seekling Alpha” https://seekingalpha.com/symbol/GLDM Accessed 23 Oct 2022
  5. “SPDR® Gold MiniShares℠ Trust Prospectus – State Street Global Advisors SPDR” https://www.ssga.com/us/en/institutional/etfs/resources/doc-viewer#gldm&prospectus Accessed 23 Oct 2022
  6. “SPDR® Gold MiniShares℠ Trust Prospectus – State Street Global Advisors SPDR” https://www.ssga.com/us/en/institutional/etfs/resources/doc-viewer#gldm&prospectus Accessed 23 Oct 2022
  • vantage academy open account

    Open Trading Account

    Discover the endless trading possibilities with our cutting-edge platform, designed to empower both beginners and seasoned traders alike.

  • vantage academy app

    Download Vantage App

    Trade on the go with the Vantage All-In-One Trading App, where smooth execution and market access come together in the palm of your hand.

  • vantage academy start trading

    Start Trading

    Are you an existing user? Login to your account to start trading 1,000+ products including forex, indices, gold, shares and more.