Some ETPs are more similar to mutual funds than others. Like investment funds, ETFs are pooled investment funds that offer investors an interest in a professionally managed, diversified investment portfolio. Unlike investment funds, however, ETF stocks are traded like stocks and can be bought or sold at fluctuating prices throughout the trading day. They are also subject to bid-ask spreads, which represent the difference between the highest price a buyer will pay and the lowest price at which a seller sells shares of a stock at any given time
The most common reason why retail investors buy gold ETFs is diversification. Owning different investments minimizes the risk of investing too much in a single asset. IAUM tracks the London Bullion Market Association (LBMA) gold prices and provides information on the daily price movements of gold bars. When choosing gold ETFs, decide whether you want to invest in physical gold or in publicly traded companies that mine
Another popular option is that this fund also tracks the spot price of gold by investing in gold bars that are stored in vaults around the world.