Editor’s Note
This article outlines a specific ETF as a vehicle for gaining exposure to gold, highlighting its role in portfolio diversification as a traditional safe-haven asset.
For any remaining stragglers, we present an ETF/Exchange-Traded Fund that allows taking bullish positions in gold with liquidity and moderate costs.
Investing in commodities offers a wide range of possibilities and serves different investment objectives. One of the most common reasons is portfolio diversification: gold has historically been the safe-haven asset par excellence, with low correlation to traditional fixed-income and equity assets, providing a diversifying effect.
Another motivation can be protection against political and geopolitical instability, the depreciation of the US dollar, or simply exposure to the consumption of raw materials needed for industry. In any of these cases, investing through an ETP—whether an ETC (Exchange Traded Commodity) or an ETF (Exchange Traded Fund) that invests in metal-producing and mining companies—allows for improving the portfolio in terms of profitability and risk control.
The price of gold has maintained a clear upward trend since the lows of 2016, when it was around $1,060/ounce. At the beginning of 2019, it reached $1,285/ounce, and after the lows recorded with the outbreak of the pandemic, around $1,498/ounce, it has climbed to its current level, around $3,658/ounce, representing an appreciation of +184.6% since the initial effects of COVID-19.
In 2025 so far, gold has accumulated a gain of nearly 40%.
However, in financial markets, the future is always what matters. Under our estimates, demand for this precious metal will remain solid both in jewelry and industrial uses, while geopolitical conflicts will continue to drive many governments to increase their reserves. This is compounded by the fact that supply is growing at a slower pace than demand.
In summary, everything points to the upward trend in gold, albeit with intermediate corrections, continuing in the medium and long term.
For retail investors, positioning in gold through the physical purchase of bullion is not recommended, as it involves high risks and costs. The most efficient option is to do so through an ETC or commodity exchange-traded fund.
At Estrategias de Inversión, we recommended the WisdomTree Physical Gold ETF in September 2023, which has accumulated a return of +72% since then.
In April 2024, we suggested the Invesco Physical Gold ETC, with a gain of over +43% since our recommendation.
And, almost a year ago, in October 2024, we advised the VanEck Gold Miners UCITS ETF for those who had not yet taken bullish positions in gold; the latter has already accumulated an appreciation of +50% since our analysis.
For any remaining stragglers, today we present an ETF/Exchange-Traded Fund that allows taking bullish positions in gold with liquidity and moderate costs: the L&G Gold Mining UCITS ETF (ISIN: IE00B3CNHG25).
Its investment philosophy consists of investing in global companies actively involved in gold mining, understood as exploration drilling, geological evaluation, financing, development, extraction, initial refining, and mineral delivery activities. The ETF’s components are exclusively companies that generate at least 50% of their revenue from gold production.
It is a passively managed fund with direct physical replication, in proportions similar to the weightings of its benchmark index, the Solactive Global Gold Miners Net Total Return Index (its benchmark). Launched in November 2008, its share class currency is USD, so European investors assume additional exposure to the dollar. It has a dividend reinvestment policy, total expenses (TER) of 0.55%, and a risk rating of 7 on a scale of 1 (minimum risk) to 7 (maximum). It complies with UCITS regulation and has a European passport.
As of 14/09/2025, the net asset value stands at €73.14/share, with assets under management of €543.6 million.
| INDICATORS | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| Return | 86.59% | 45.95% | 15.84% | 20.56% |
| Volatility | 36.31 | 35.21 | 34.93 | 36.11 |
| Maximum Drawdown | -14.67% | -21.81% | -46.66% | -47.54% |
| Beta | 1.17 | 1.14 | 1.08 | 1.04 |
| R-squared | 0.95 | 0.96 | 0.84 | 0.72 |
| Correlation | 0.98 | 0.98 | 0.92 | 0.85 |
| Tracking Error | 2.57 | 2.24 | 3.95 | 5.26 |
| Sharpe Ratio | 0.45 | 0.31 | 0.08 | 0.13 |
| Sortino Ratio | 0.63 | 0.35 | 0.08 | 0.14 |
| Treynor Ratio | 3.76 | 2.65 | 0.70 | 1.23 |
| Information Ratio | 0.30 | 0.43 | – | 0.03 |
| Alpha | 0.16 | 0.67 | -0.21 | 0.12 |
The L&G Gold Mining UCITS ETF has offered exceptional performance in the last year, with a gain of nearly 87%, well above physical gold and global equities. Although longer-term results are more moderate, it maintains a very high correlation with its benchmark index and faithfully reflects the evolution of the sector.
In summary, this is a passively managed fund with direct exposure to gold mining companies, providing a clearly bullish profile during phases of metal strength. Despite its high volatility, the data confirms its potential as a very interesting tactical tool for diversifying portfolios and benefiting from a gold-friendly environment.
