Ultimate Guide: How to Invest in Gold through Stocks & Shares ISA

Have you ever wondered about how to invest in gold and not worry about securing a safe for it’s storage? Gold has been a popular investment option for centuries, and its performance over the last decade has been particularly noteworthy. Let’s delve into the world of Gold ETFs in the UK and explore some of the best options available to investors.

What are Gold ETFs?

Investing in Gold ETFs (Exchange-Traded Funds) is an increasingly popular strategy for those looking to gain exposure to gold without the hassles of physical ownership. If you’re curious about how to invest in gold, these funds offer a straightforward and efficient means of doing so.

Gold ETFs track the price of gold and are traded on stock exchanges just like regular shares, making them a convenient option for investors. One significant advantage of Gold ETFs is their liquidity; you can easily buy and sell them through your brokerage account, eliminating concerns about storage or security that come with physical gold. For anyone exploring how to invest in gold, this feature makes Gold ETFs an attractive choice.

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Moreover, many investors turn to Gold ETFs as part of their diversification strategy. Gold has long been regarded as a hedge against inflation and market fluctuations, thereby serving as a strategic component in an investment portfolio. By understanding how to invest in gold through these funds, you can effectively reduce risks associated with more traditional equity investments.

Before you embark on your journey of how to invest in gold, it’s crucial to evaluate different Gold ETFs available on the market. Consider factors such as expense ratios and historical fund performance when making your decision. By taking the time to learn how to invest in gold wisely, you’ll be better positioned to safeguard and grow your wealth over time.

Gold Performance in the Last Decade

Gold has shown impressive performance over the past decade, with significant price appreciation and volatility:

• From 2015 to 2025, gold prices increased by approximately 155%.
• Gold as a commodity has seen significant returns from 2015 to 2025. The average closing price of gold in 2015 was $1,158.86, while in 2025 it reached an average of $2,780.701. It reached its all-time high in US dollars on February 20, 2025, at $2,954.72
• Despite some fluctuations, gold has maintained a generally upward trend, showcasing its appeal as a long-term investment.

Advantages of Investing in Gold

1. Hedge Against Inflation: Gold often maintains its value during periods of high inflation, protecting investors’ purchasing power.

2. Portfolio Diversification: Gold typically has a low correlation with other asset classes, helping to reduce overall portfolio risk.

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3. Safe Haven Asset: During times of economic or political uncertainty, investors often flock to gold as a safe haven.

4. Currency Hedge: Gold can protect against currency devaluation, particularly for investors holding assets in weaker currencies.

Gold as a Hedge During Bear Markets

During bear markets or economic downturns, investors often rush towards gold investments for several reasons:

1. Negative Correlation: Gold prices often move inversely to stock market performance, providing a counterbalance to falling equity prices.

2. Preservation of Capital: As a tangible asset, gold is seen as a store of value during market turbulence.

3. Flight to Quality: In times of market stress, investors seek high-quality, liquid assets like gold.

Best Gold ETFs to Buy in the UK

Based on the specified criteria (annualized returns >10% for 1, 3, and 5 years, expense ratio <0.5%, decent AUM, and at least 5 years old), here are some of the best Gold ETFs available in the UK:

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1. iShares Physical Gold ETC (SGLN)

• 1-Year Return: 44.89%
• 3-Year Annualised Return: 17.26%
• 5-Year Annualised Return: 12.32%
• Expense Ratio: 0.12%
• AUM: £12.5 billion
• Inception Date: April 2011

Risks:

• Exposed to gold price volatility
• No dividend payments

Rewards:

• Low expense ratio
• Large AUM provides good liquidity
• Physical backing reduces counterparty risk

2. Invesco Physical Gold ETC (SGLD)

• 1-Year Return: 44.91%
• 3-Year Annualised Return: 17.02%
• 5-Year Annualised Return: 12.35%
• Expense Ratio: 0.12%
• AUM: £10.2 billion
• Inception Date: June 2009

Risks:

• Slightly higher expense ratio than SGLN
• Gold price fluctuations can impact returns

Rewards:

• Long track record
• Physical gold backing
• Good liquidity due to large AUM

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3. WisdomTree Physical Gold (PHAU)

• 1-Year Return: 44.71%
• 3-Year Annualised Return: 16.74%
• 5-Year Annualised Return: 12.05%
• Expense Ratio: 0.39%
• AUM: £5.8 billion
• Inception Date: April 2007

Risks:

• Higher expense ratio compared to peers
• Smaller AUM may affect liquidity

Rewards:

• Longest track record among listed ETFs
• Physical gold backing
• Consistent performance

Conclusion: How to invest in Gold in 2025

Gold ETFs offer UK investors an efficient way to gain exposure to gold without the complexities of owning physical bullion. The ETFs listed above have demonstrated strong performance over various time horizons while maintaining low expense ratios and sufficient liquidity.

When considering an investment in gold ETFs, it’s crucial to assess your overall portfolio strategy, risk tolerance, and investment goals. While gold can provide valuable diversification and potential protection during market downturns, it’s important to remember that its price can be volatile and it doesn’t provide income in the form of dividends or interest.

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As with any investment decision, thorough research and possibly consulting with a financial advisor is recommended before adding gold ETFs to your portfolio.

Disclaimer:

The content above is for educational purposes only and provides an alternative approach to “how to invest in gold” through a Stocks and Shares ISA in the UK, rather than traditional methods like physical gold or bars.

This guide on “how to invest in gold” is based on research from AMC ETF websites, Morning Star, and Just ETF Portals. While this information aims to help you understand “how to invest in gold” effectively, it is not personalized financial advice. Before deciding “how to invest in gold” or making any investment decisions, consult a qualified financial advisor.

Past performance is not indicative of future results, and investing always carries risks. This article on “how to invest in gold” does not guarantee returns or endorse specific products. Always conduct your own research and seek professional guidance tailored to your financial goals.

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