- 36% of surveyed investors don't invest in gold because they don't know enough about the ways that they can invest in gold
- 89% of surveyed investors who own gold ETFs have had their financial advisor explain the benefits of investing in gold
State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), released the results of its Gold ETF Impact Study: Advisor Edition, which was designed to better understand investor attitudes and behaviors around investing in gold. According to the research, there is significant opportunity for investor education when it comes to gold investments, and advisors are playing an important role in helping clients understand its role in portfolios.
The study found that lack of knowledge is the number one reason why, among the options provided, surveyed investors do not invest in gold, with more than a third indicating they do not have gold in their portfolio because they do not know enough about the ways they can invest in gold. Furthermore, only 41% of surveyed investors agree that they understand what influences the price of gold, compared to 75% among those who actually do have gold in their portfolios.
When it comes to investing in gold ETFs, the advisors’ role as educator is critical. Nine out of 10 (91%) surveyed investors who own gold ETFs indicated they were informed by their financial advisor about the different ways to invest in gold. A similar percentage (91%) of surveyed investors indicated discussing an investment in gold with their financial advisors.
“Investors have good instincts about where – and when – to get objective advice. But it’s likely they will need even more guidance to achieve their financial goals as markets continue to react to higher interest rates, lower consumer sentiment and stubborn inflation,” said Allison Bonds, Head of Private and Independent Wealth Management at State Street Global Advisors.
Among surveyed investors with a financial advisor and holding a gold ETF in their portfolio:
- 91% have discussed investing in gold with their financial advisor compared with 36% of all surveyed investors with financial advisors;
- 89% report their financial advisor has explained the benefits of having gold in their investment portfolio compared with 35% of all surveyed investors with financial advisors;
- 83% noted that their financial advisor recommended gold for their long-term investment portfolio versus 26% of all surveyed investors with financial advisors; and
- 55% reported their financial advisor recommended gold as a short-term investment given current markets compared to 17% of all surveyed investors with financial advisors.
The survey also revealed approximately three in four gold ETF investors (73%) agree that gold ETFs have improved the performance of their investment portfolio, with three-fourths (76%) reporting that ETFs are a more cost-effective way to invest in gold.
Notably, across all surveyed investors (advised and self-directed) those who hold gold ETFs are more likely to have investable assets of $500,000 or more (82%) than those surveyed investors who do not hold gold ETFs (64%).
“Financial advisors can be an invaluable resource for investors seeking to preserve wealth and improve the diversification of their portfolio as they may be more knowledgeable about the unique attributes of gold and the role it can play in a portfolio,” Bonds said. “With the introduction of SPDR Gold Shares (GLD®) nearly two decades ago, and more recently SPDR Gold MiniShares (GLDM®) five years ago, access to gold has been democratized for every type of investor.”
The top three variables surveyed gold ETF investors considered when buying a gold ETF are:
- Expense ratio (65%)
- A structure that is physically backed by gold (55%)
- Reputation of provider (48%)
SPDR gold ETF assets under management have increased $2.9 billion year-to-date from $58.6 billion as of 12/31/22 to $61.5 billion as 8/31/23.1
Advisors who understand what is behind this interest may be better positioned to educate their clients about the potential benefits and risks of investing in gold, and how gold can play multiple roles in one’s overall portfolio strategy.
“We believe that better informed investors make better clients, as we believe that they’re less likely to invest in products they don’t understand, and we believe that they are less likely to panic when markets fluctuate over the short-term,” added Bonds.
Access the full study results here: Gold ETF Impact Study 2023.
About State Street Global Advisors Gold ETF Impact Study
State Street Global Advisors, in partnership with A2Bplanning and Prodege, conducted an online survey among individual investors in the US. Data was collected from March 24 to April 19, 2023 from a nationally representative sample of approximately 1,000 adults ages 25+ who have investable assets of $250,000 or more. From the random sample, there were 95 individual investors who held a gold ETF(s). An augment of 10 individual investors who held a gold ETF(s) was performed to achieve a sufficient sample size for analysis.
The survey consisted of 14 close-end questions plus profiling questions.
About SPDR Exchange Traded Funds
SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. The funds provide investors with the flexibility to select investments that are aligned to their investment strategy. For more information, visit www.ssga.com.
About State Street Global Advisors
For four decades, State Street Global Advisors has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world’s fourth largest asset manager2 with US $3.8 trillion3 under our care.
1 Source: Bloomberg Finance, L.P. State Street Global Advisors, as of 8/31/23
2 Pensions & Investments Research Center, as of 12/31/22.
3This figure is presented as of June 30, 2023 and includes approximately $63 billion USD of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.
Important Risk Disclosures
The responses of the surveyed investors may not be indicative of the experiences of other investors.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
Past performance is not a reliable indicator of future performance.
Diversification does not ensure a profit or guarantee against loss.
The views expressed in this material are the views of State Street SPDR through the period ended August 18, 2023 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
The trademarks and service marks referenced herein are the property of their respective owners. Third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to the use of such data.
Investing involves risk including the risk of loss of principal.
This communication is not intended to be an investment recommendation or investment advice and should not be relied upon as such.
Investing involves risk, and you could lose money on an investment in each of SPDR® Gold Shares Trust (“GLD®” or “GLD”) and SPDR® Gold MiniShares® Trust (“GLDM®” or “GLDM”), a series of the World Gold Trust (together, the “Funds”).
Commodities and commodity-index linked securities may be affected by changes in overall market movements, changes in interest rates, and other factors such as weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.
Investing in commodities entails significant risk and is not appropriate for all investors.
Important Information Relating to GLD® and GLDM®:
GLD and the World Gold Trust have each filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for GLD and GLDM, respectively. Before you invest, you should read the prospectus in the registration statement and other documents each Fund has filed with the SEC for more complete information about each Fund and these offerings. Please see each Fund’s prospectus for a detailed discussion of the risks of investing in each Fund’s shares. The GLD prospectus is available by clicking here, and the GLDM prospectus is available by clicking here. You may get these documents for free by visiting EDGAR on the SEC website at sec.gov or by visiting spdrgoldshares.com. Alternatively, the Funds or any authorized participant will arrange to send you the prospectus if you request it by calling 866.320.4053.
None of the Funds is an investment company registered under the Investment Company Act of 1940 (the “1940 Act”). As a result, shareholders of each Fund do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act. GLD and GLDM are not subject to regulation under the Commodity Exchange Act of 1936 (the “CEA”). As a result, shareholders of each of GLD and GLDM do not have the protections afforded by the CEA.
Shares of each Fund trade like stocks, are subject to investment risk and will fluctuate in market value.
The values of GLD shares and GLDM shares relate directly to the value of the gold held by each Fund (less its expenses), respectively. Fluctuations in the price of gold could materially and adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be more or less than the value of the gold represented by them.
None of the Funds generate any income, and as each Fund regularly sells gold to pay for its ongoing expenses, the amount of gold represented by each Fund share will decline over time to that extent.
The World Gold Council name and logo are a registered trademark and used with the permission of the World Gold Council pursuant to a license agreement. The World Gold Council is not responsible for the content of, and is not liable for the use of or reliance on, this material. World Gold Council is an affiliate of the Sponsor of each of GLD and GLDM.
MiniShares® is a registered trademark of WGC USA Asset Management Company, LLC used with the permission of WGC USA Asset Management Company, LLC. GLD® and GLDM® are registered trademarks of World Gold Trust Services, LLC used with the permission of World Gold Trust Services, LLC.
For more information, please contact the Marketing Agent for GLD and GLDM: State Street Global Advisors Funds Distributors, LLC, One Iron Street, Boston, MA, 02210; T: +1 866 320 4053 spdrgoldshares.com
Intellectual Property Information: The S&P 500® Index is a product of S&P Dow Jones Indices LLC or its affiliates (“S&P DJI”) and have been licensed for use by State Street Global Advisors. S&P®, SPDR®, S&P 500®, US 500 and the 500 are trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and has been licensed for use by S&P Dow Jones Indices; and these trademarks have been licensed for use by S&P DJI and sublicensed for certain purposes by State Street Global Advisors. The fund is not sponsored, endorsed, sold or promoted by S&P DJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of these indices.
Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call 1-866-787-2257 or visit ssga.com. Read it carefully.
Not FDIC Insured · No Bank Guarantee · May Lose Value
Distributor:
State Street Global Advisors Funds Distributors, LLC, member FINRA, SIPC, an indirect wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. Certain State Street affiliates provide services and receive fees from the SPDR ETFs.
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All Rights Reserved.
5894987.1.1.AM.RTL Exp. Date: 09/30/2024
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Contacts
Deborah Heindel
+1 617 662 9927
DHEINDEL@StateStreet.com
