Which generations lean more toward gold investments? And what do investors consider as gold’s key benefits and factors when purchasing? As part of our Gold ETF Impact Study 2023, we uncover significant trends associated with this asset class.
Perhaps most surprisingly, among approximately 1,000 investors surveyed, we found that millennials averaged a 17% allocation to gold, while Baby Boomers and Gen X investors lagged behind with a 10% allocation.
Figure 1: Sentiment and Behaviors Toward Investing in Gold
A Generational Comparison
|Average percent of my portfolio invested in gold||17%||10%||10%|
|I agree that it’s easy for investors to buy/sell gold||82%||56%||75%|
|I agree that the overall benefits of gold outweigh lack of yield||84%||76%||65%|
|I agree that gold ETFs are the best way to invest in gold||69%||35%||55%|
|I agree that it’s safer to buy gold ETFs than gold bullion||64%||35%||40%|
|I am likely to increase my investment in gold over the next 6-12 months||67%||44%||60%|
Source: State Street Global Advisors, as of April 19, 2023. *Note that the base size is under 30 for Baby Boomers (n=20).
Millennials also reported a greater appreciation for the convenience of investing in gold through exchange traded funds (ETFs). More Millennial investors (69%) agreed that gold ETFs are the best way to invest in gold compared to Baby Boomer (55%) and Gen X (35%) investors.
And survey participants who hold gold ETFs are more likely to be Millennials.
When we asked all surveyed investors a series of questions about the benefits of gold, more than half (55%) said diversification is a benefit to having gold in an investment portfolio, and nearly a third (30%) perceive good returns over the long term as a benefit.
Figure 3: The Benefits of Gold, Ranked
Surveying All Investors Who Participated in This Study
That said, those who invest in gold and/or gold ETFs perceive more benefits to having gold in an investment portfolio than those who do not. More than two-thirds of gold investors said diversification is a benefit to having gold in an investment portfolio, and nearly half perceived good returns over the long term as a benefit.
Figure 4: The Benefits of Gold, Ranked
Surveying Investors Who Hold Gold or Gold ETFs
More robust education efforts on the benefits of gold investments may help investors feel better about the long-term impacts these products can have on their portfolios.
Nearly two-thirds (65%) of surveyed investors rank the cost/expense ratio as the most important factor when selecting a gold ETF. Following the cost/expense ratio, the purchasing considerations viewed as most important are:
Before these factors can be weighed, though, we found that education is essential in the adoption of gold investments. So how can proper education make a difference?
When we launched SPDR® Gold Shares (GLD®) in 2004, it was the first US gold-backed ETF. GLD’s arrival made it convenient and cost effective for investors to have gold exposure in their portfolios. Since then, we’ve launched the low-cost SPDR Gold MiniShares® (GLDM®) and built a dedicated gold strategy team to help investors understand how gold can help their portfolio.
State Street Global Advisors, in partnership with Prodege and A2Bplanning, conducted an online study surveying a random sample of approximately 1,000 individual investors in the US. Read more about the details.
1Bloomberg Finance L.P. & State Street Global Advisors. GLD commenced operations on November 18, 2004. GLD AUM = $57.0 billion as of June 30, 2023.
2Bloomberg Finance L.P., & State Street Global Advisors, as of May 31, 2023.
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The views expressed in this material are the views of 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.
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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”).
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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.
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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