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After continuing to rise, gold has recently experienced a short-term correction. Currently, COMEX gold has fallen from the previous intraday high of more than 2488 to more than 2385 points. Many investors want to take the opportunity to "get on board". (Data source: WIND, as of July 26, 2024)

So, facing the numerous gold fund products on the market, how should we choose? Overall, the existing gold funds can be roughly divided into three categories, each with its own advantages, and investors can choose according to their needs.

1. Gold Stock ETFs

This type of product mainly invests in a basket of gold-related stocks, including listed companies engaged in gold mining, smelting and sales. Therefore, the investment income of gold stock ETFs will not only be affected by the gold price, but also by the profitability, cost control, management decision-making and other factors of these listed companies.

Judging from the tracking index of existing gold stock ETFs, the performance of the SSH Gold Stock Index is similar to the trend of gold prices, which can reflect the market conditions of gold assets and is expected to outperform gold prices.

SSH Gold Stock Index and COMEX Gold Growth in Each Stage

Data source: WIND, as of July 26, 2024

However, it should also be noted that, as can be seen from the trend of the yield curve, the SSH gold stock index is more volatile than COMEX gold, especially if the stock market falls sharply, the former is likely to fall more than the gold price.

SSH Gold Stock Index and COMEX Gold Trends since 2019

Data source: WIND, as of July 26, 2024

For investors who allocate gold for risk aversion and stability, gold stock ETFs may not be the most suitable choice, but they are suitable for gold investors with higher risk tolerance and seeking better returns.

2. QDII gold funds

This type of product focuses on "gold rush" overseas and mainly invests in overseas gold ETFs or related gold stocks. Therefore, the investment returns can be better linked to the gold price.

The benefits of allocating this type of gold fund are, first, being able to invest in gold assets globally and take advantage of the rising global gold prices, and second, being able to take advantage of changes in exchange rates to earn certain potential returns.

However, because it is a QDII fund, investors also need to pay attention to the QDII quota. For example, as the gold price has continued to soar this year, some QDII gold funds have recently suspended large-scale subscriptions. In addition, the subscription and redemption of QDII funds usually takes longer than investing in domestic fund products, so investors may need to wait patiently.

3. Gold ETFs

Gold ETFs are directly linked to gold prices and can grasp the gold market more fully and efficiently. They are also the type with the largest number of products among the three types of gold funds, and investors have relatively more optional products.

Investing in gold ETFs is relatively convenient. Investors only need to have a securities account. The operation is similar to buying and selling stocks, and it supports T+0 trading. It can be sold on the same day it is bought, which is convenient for investors with arbitrage needs and highly efficient in fund use.

At the same time, the investment fees and capital thresholds of gold ETFs are relatively low. When investors buy gold ETFs, it is equivalent to holding a physical gold certificate stored in a gold exchange, avoiding the additional costs of storage, insurance, etc. when purchasing physical gold.

If investors intend to take advantage of the gold market with the help of gold ETFs, they can choose relatively large-scale products, such as Huaan Gold ETF (518880).

1. "Old" gold ETF, ranked first in performance in the past three years

Huaan Gold ETF is one of the earlier gold ETF products in the industry. It closely tracks the price changes of the AU9999 spot contract of the Shanghai Gold Exchange and has been operating well for 11 years since its establishment in July 2013.

Judging from investment performance, Huaan Gold ETF has achieved returns of 14.36%, 21.99%, 48.16%, 70.41% and 100.34% in the past 6 months, 1 year, 3 years and 5 years since its establishment, helping investors to better grasp the gold market.

Huaan Gold ETF Historical Performance

Data source: Fund periodic reports, as of June 30, 2024

Among similar gold ETF funds, Huaan Gold ETF also showed a leading advantage, with the yield ranking 4/14 and 1/11 in the past 1 year and 3 years. (Data source: Galaxy Securities, as of June 30, 2024)

2. Active trading and good liquidity to meet the needs of on-site trading

For ETF products, on-site liquidity is undoubtedly very important, which is conducive to investors' efficient buying and selling, arbitrage and profit from price differences, etc. The on-site circulation shares and the latest scale of Huaan Gold ETF reached 4.527 billion and 24.253 billion yuan respectively, both ranking first among all gold ETFs, and the scale accounts for more than 47% of all gold ETFs. (Data source: WIND, as of July 26, 2024)

3. Small tracking error, better grasp of gold market

As an ETF product, Huaan Gold ETF operates with a relatively high position, while striving to keep the absolute value of the daily tracking deviation within 0.25% and the annual tracking error within 3%, so as to better grasp the long-term opportunities of gold.

In addition to the Huaan Gold ETF, which is suitable for on-exchange investors, investors who are used to buying funds over the counter can also use the Huaan Gold ETF Connect (Class A: 000216, Class C: 000217) to make a layout. This fund mainly invests in the target ETF (i.e. Huaan Gold ETF) and can also closely track the performance of China's gold spot price.

Huaan Gold ETF Linkage A's returns in the past 6 months, 1 year, 3 years, 5 years, and since its establishment were 13.72%, 21.08%, 46.48%, 68.46%, and 94.47%, while the benchmark returns in the same period were 13.93%, 21.50%, 47.85%, 71.23%, and 97.08%. At the same time, the returns in the past 1 year and 3 years also ranked 4/13 and 3/11 in the same category. (Data source: performance comes from the fund's regular report, ranking comes from Galaxy Securities, and similar products refer to the Gold ETF Linkage Fund (Class A), as of June 30, 2024)

Note: Based on the fund's periodic report data, as of June 30, 2024.

Huaan Gold ETF was established on July 18, 2013, and its performance benchmark is the yield of domestic gold spot price. Its annual performance (and performance benchmark performance) from 2013 to 2023 and the first half of 2024 is -10.81% (-8.77%), 2.29% (1.75%), -7.57% (-7.37%), 18.15% (18.42%), 3.31% (3.45%), 3.64% (4.25%), 19.15% (19.75%), 13.81% (14.44%), -4.71% (-4.14%), 9.24% (9.80%), 16.34% (16.83%), 14.36% (14.66%). Former fund managers: Xu Yiyi (2013.07.18-2018.09.27), Xu Zhiyan (2013.07.18-present).

Huaan Gold ETF Link A was established on August 22, 2013. Its performance benchmark is the domestic gold spot price yield × 95% + RMB demand deposit after-tax interest rate × 5%. The annual performance (and performance benchmark performance) from 2013 to 2023 and the first half of 2024 is -11.90% (-12.48%), 1.93% (1.68%), -6.79% (-6.98%), 17.47% (17.51%), 2.84% (3.29%), 3.49% (4.05%), 19.13% (18.78%), 13.90% (13.73%), -4.77% (-3.92%), 9.07% (9.33%), 15.95% (16.01%), 13.72% (13.93%). Former fund managers: Xu Yiyi (2013.08.22-2018.09.27), Xu Zhiyan (2013.08.22-present).

Risk Warning: Investors are kindly requested to pay attention to the special risks of investing in gold-themed funds, such as the risk of gold market fluctuations, the risk of deviation between fund portfolio returns and domestic gold spot price returns, and the investment risk of the gold spot market of the Shanghai Gold Exchange. The fund management company does not guarantee that the fund will make a profit or a minimum return, and the fund's past performance cannot predict future returns. The operation time of funds in my country is relatively short and cannot reflect all stages of stock market development. The market is risky, and investment should be cautious and at your own risk. Before investing in funds, investors should carefully read the fund legal documents such as the "Fund Contract" and "Recruitment Instructions", fully understand the risk-return characteristics of fund products, and make independent decisions on fund investment and choose appropriate fund products based on their own risk tolerance, investment period and investment objectives on the basis of understanding the product situation and listening to the sales agency's suitability opinions.