Gold is traditionally viewed as a safe-haven asset — a reliable store of value during periods of market stress and economic uncertainty. The simplest way to gain exposure to gold today is by buying a gold-backed ETF.
Why ETFs Are Advantageous for Gold Investment
There are several ways to invest in gold, each with distinct advantages and drawbacks — so investors should choose based on their strategic goals.
You can buy physical gold: bullion bars or investment-grade, commemorative, and jubilee coins. However, these are poorly suited for short-term trading due to taxation (VAT and capital gains) and wide bid–ask spreads. They make sense only for long-term holding — years or even decades.
Another option is opening an Unallocated Metal Account (UMA). Essentially, it’s like a bank deposit where the “currency” is gold. A major drawback is the lack of deposit insurance from the Deposit Insurance Agency (DIA). Also, UMAs involve a spread between purchase and sale prices. This route suits only long-term investors.
On the stock exchange, gold exposure is also available via derivatives — such as futures contracts. This approach is recommended only for experienced investors who understand margin trading (leverage), high volatility, and associated risks.
Arguably, the simplest and most popular method today is purchasing a gold ETF.
FXGD Exchange-Traded Fund
To buy global-listed ETFs, you typically need qualified investor status. For beginners, ETFs traded on the Moscow Exchange are more accessible. In Russia, one of the leading ETF providers is FinEx. Among its funds is the FXGD ETF.
FXGD is a USD-denominated gold investment instrument with minimal bid–ask spread and no VAT. It closely tracks the global spot price of gold, offering protection against inflation and ruble depreciation — especially when the USD/RUB exchange rate rises.
FXGD serves as a strong alternative to Unallocated Metal Accounts: shares can be bought or sold instantly on the exchange without visiting a bank. Compared to gold futures, FXGD carries significantly lower risk — there’s no leverage involved. The fund does not hold physical gold directly. Its portfolio is synthetic, built from financial instruments that precisely replicate gold price movements.
At the end of last year, FXGD switched to physical replication — storing LBMA-certified gold bars. Its core objective remains unchanged: to track the spot price of gold as closely as possible. All assets in the fund consist exclusively of gold bars meeting the London Bullion Market Association (LBMA) standard — the world’s largest OTC precious metals trading association.
One FXGD share currently costs under RUB 1,000 — enabling gold investment with even modest capital. Shares can also be purchased in US dollars.
In 2020, FXGD shares rose by 53.17% in rubles and 26.78% in USD. Over five years, cumulative returns stood at 92.99% (RUB) and 56.91% (USD).
FAQ
What does FXGD track?
FXGD tracks the LBMA gold spot price in USD, using either synthetic replication (pre-2020) or physical gold bars (since late 2020).
Is FXGD subject to VAT in Russia?
No — unlike physical gold purchases or UMAs, FXGD ETF shares are exempt from VAT under Russian tax law.
Can I buy FXGD in rubles or only in USD?
You can buy FXGD in both RUB and USD on the Moscow Exchange — settlement currency depends on your broker account settings.
