This article first appeared in Capital, The Edge Malaysia Weekly on November 17, 2025 - November 23, 2025

GOLD has featured prominently in investment portfolios this year, with buying interest surging to new highs. The same can be said of gold-backed exchange-traded funds (ETFs), as investors turn to paper gold for ease of access and exposure without storage risk.

Globally, gold-backed ETFs have seen some of their strongest inflows in years — more than US$8 billion in October 2025 alone, according to the World Gold Council. Its data shows that these ETFs saw inflows for five months in a row, with “global ETFs just two months away from recording what looks to be their strongest year on record”.

Mirroring global appetite for the yellow metal, Malaysia’s only gold ETF — TradePlus Shariah Gold Tracker, listed since 2017 and managed by AHAM Asset Management Bhd (AHAM Capital) — has enjoyed a visible pickup this year as investors who tend to prefer jewellery or physical bullion are now open to financial instruments that provide the same exposure with less hassle. The ETF invests a minimum of 95% in physical gold bars.

“We’ve seen a noticeable uptick in both retail and institutional flows. Investors are looking for safe-haven exposure without the logistics of physical ownership. The ETF gives them that accessibility and transparency,” AHAM Capital chief of product solutions Anton Tan tells The Edge.

Acknowledging the macro backdrop which brought gold into focus, he adds that more Malaysians are now familiar with ETFs, thanks to digital investment platforms, and that TradePlus Shariah Gold Tracker’s shariah-compliant structure has given added comfort to a large segment of investors.

Looking at the data for TradePlus tracker on Bursa Malaysia, in which the local ETF’s volumes are measured in the hundreds of thousands rather than in the tens of millions as recorded by the US’ SPDR Gold Shares ETF, it is clear that the local gold ETF is still nascent compared with those in developed markets.

“The global ETF scene is massive. The US alone has thousands of listed ETFs and trillions in assets. In Malaysia, we’re still at the stage of building education, liquidity and ecosystem depth,” says Tan.

He adds that AHAM has been proactive in working with participating dealers and online brokers to improve trading liquidity. “We’re seeing more consistent participation, but we still have work to do in tightening spreads and scaling up market-making.”

However, he cautions that the fund is a diversification tool, and not a speculative instrument. “Investors should see it as a way to hedge against volatility in other asset classes — equities, property or fixed income — rather than chase short-term gains,” he emphasises.

According to Tan, the total assets under management (AUM) of TradePlus Shariah Gold Tracker have increased meaningfully over the years, growing from RM57.2 million in 2023 to RM102.5 million at end-2024.  

“As at Oct 31, 2025, the fund’s AUM had vaulted to RM407.5 million, reflecting sustained inflows from multiple distribution channels,” he says.

In an interview with BIMB Securities Sdn Bhd director of research Mohd Redza Abdul Rahman, he notes that Malaysia’s huge flows into gold-linked investments comes as part of a broader structural shift.

“The appeal goes beyond short-term price moves. It reflects growing investor awareness of tail-risks, rising geopolitical uncertainty and central bank diversification away from traditional reserves. In our reports, we flagged that fiscal stress, safe-haven demand and the shift in central-bank behaviour make gold an enduring hedge,” he says.

“In October, we raised its long-run assumptions (US$3,850 per oz) but tempered enthusiasm with a warning that technical momentum may be overextended. In short, we think gold-linked products have a rising role in Malaysian investor portfolios, especially for those seeking protection against macro-policy volatility, but that entry and sizing should be carefully managed.”

In an Oct 9 note, BIMB says the recent rally in gold looked “overstretched in the short to medium term, justifying profit-taking before a pullback”.

It pointed out that gold had rallied by 22% since mid-August, lifted by US equity euphoria and prolonged government shutdown fears, with technical indicators signalling that the price had overshot and that a stabilisation phase could trigger a retracement to US$3,850 per oz.

The bank-backed research house then revised its target price for TradePlus Shariah Gold Tracker to RM5.25, from RM4.78 previously, based on a gold price of US$3,850/oz and a USD/MYR exchange rate of 4.20.

“But this suggests a staged approach to re-entry, ideally on meaningful pullbacks rather than chasing further highs, perhaps at around 7% to 8% pullback from the current price, buying in a staggered approach rather than a single entry point, and pair it with protective structures such as stop-loss levels or option hedges. This reflects our concern about technical overstretch and crowded positioning, while keeping exposure to the structural upside,” says Redza.

Nevertheless, he believes the momentum will persist in 2026, particularly if monetary policy globally pivots towards easing. “Even modest rate cuts could push real yields lower and sustain the appeal of gold.”

BIMB predicts that gold could trade between US$2,350 and US$2,500 per oz by year end and expects an upside break could take off should geopolitical risk escalate or the US dollar weaken sharply.

Like AHAM Capital’s Tan, Redza cautions investors to not be in an “overweight” position on gold and go for “a balanced allocation of 5% to 10% in gold-related exposure via ETFs or otherwise, which is generally sufficient for hedging”.

“The key is discipline and not chasing price momentum,” he says.

From a personal advisory standpoint, Felix Neoh, director of financial planning at Finwealth Management Sdn Bhd, observes that the renewed interest in gold ETFs is part of a broader trend among Malaysian investors looking to diversify beyond property and domestic equities.

“More clients are looking for assets that are not correlated with the ringgit or local equity indices,” Neoh explains. “Gold and gold ETFs fit that brief well. They’ve delivered both stability and global exposure at a time when other markets are volatile.”

While he agrees with BIMB’s constructive stance, he warns against viewing gold purely as a momentum trade. “It’s important to remember that gold does not generate income. Its role is capital preservation, especially when inflation erodes real returns elsewhere.”

For financial planners, he says, gold ETFs provide a liquid and cost-efficient vehicle for clients who don’t want to deal with vaulting or jewellery premiums. “We typically recommend small but consistent allocations. The goal is diversification, not speculation.”

Neoh mentions that Malaysia’s ETF framework still needs strengthening to attract larger flows. “Greater liquidity, market-making incentives and investor education will help the segment scale up. Right now, awareness is growing, but it’s still early days.”

Globally, gold ETFs are well-established investment vehicles. The largest US fund, SPDR Gold Shares (GLD), holds over 900 tonnes of bullion.

Originally listed on the New York Stock Exchange in November 2004, and traded on NYSE Arca since Dec 13, 2007, SPDR Gold Shares also trades on the Singapore Exchange (SGX), Tokyo Stock Exchange, the Stock Exchange of Hong Kong and the Mexican Stock Exchange (BMV).

Malaysia’s TradePlus Shariah Gold Tracker is still small by comparison — measured in kilograms rather than tonnes — but its structure mirrors that of its global peers. According to TradePlus’ website, a minimum 95% of the fund’s assets are held in physical gold, purchased only from gold refiners accredited by the London Bullion Market Association. These gold bars are held in a segregated and allocated manner, safe-kept in a secure vault in Singapore.

AHAM Capital’s Tan admits that the gap between TradePlus and its global peers is wide, but “just needs time and liquidity to mature”. Asked what it would take for the Malaysian ETF to catch up, he points to three levers — scale, participation and education.

“Scale comes from institutional investors — pension funds, unit trust managers — recognising ETFs as efficient vehicles. Participation means more market-makers and brokers providing tighter spreads. Education is about helping investors understand that an ETF is simply a low-cost, transparent way to access an asset class,” Tan explains, noting that the elements are achievable.

“The Malaysian market is ready. It just needs consistent engagement and regulatory support,” says Neoh.

Despite the buzz around ETFs, investors have different means of plugging into the gold story. Some prefer gold-mining equities, others look at jewellery and pawnbroker stocks that benefit from high gold prices.

Private investor Ian Yoong Kah Yin offers a candid view: “I’m not invested in a gold ETF but I am in pawnbrokers on SGX, which have doubled in price. The rationale is that the pawnbroking business escalates with an appreciating gold price.

“The other positive of investing in pawnbroking stocks is that their share prices are less susceptible to a falling gold price. The recent steep fall in the gold price of 13% over a week was not mirrored by the share prices of pawnbrokers.”

His remark underscores the variety of gold-related exposure available, from physical bullion to financial instruments and gold-linked equities.

“What matters is alignment with your objective. If you want direct exposure, the ETF works. If you want leverage or yield, gold equities might make more sense. There’s no one-size-fits-all,” says Finwealth’s Neoh.

He stresses that an investor will need to evaluate the benefits and drawbacks of each form of gold investment and invest based on what is most appropriate.

“When investing in ETFs, you will need to trade the ETF on the stock exchange — either locally [on Bursa] or overseas depending on where the ETF is listed. The choice will depend on whether you want to have the investments held locally or overseas,” says Neoh.

“Malaysians will need to be mindful of the differences of onshore versus offshore trading, including ETF fund costs, share trading cost, currency risk, settlement method, trading time difference and also the estate distribution approach for assets held in Malaysia versus overseas [in the event that you die while holding these stocks]. If direct trading of ETFs seems cumbersome, consider accessing these investments via Malaysian-licensed robo-advisory platforms (digital investment managers or DIMs).”

As for whether gold’s long-term fundamentals remain intact, the experts emphasise that its near-term path will depend on the interplay of real yields, currency movements and geopolitical events.

BIMB’s Redza points out that even if gold consolidates, its appeal as a portfolio stabiliser endures. “It’s one of the few assets that historically retains value across cycles. The ETF gives local investors an accessible way to hold it,” he says.

Similarly, Tan sees the surge not as a speculative bubble, but as interest reflecting genuine diversification needs. “But as with any asset, timing matters. Investors should understand volatility and have realistic horizons.”

For now, Malaysia’s gold ETF story is still finding its footing. The TradePlus Shariah Gold Tracker has shown that local demand exists, but the market needs greater breadth and institutional involvement to mature.

If the ecosystem evolves — tighter spreads, more active participants, better investor literacy — gold ETFs could move from niche to mainstream in Malaysian portfolios, say the experts.

As Neoh notes, “It’s a matter of time. The ingredients are here — investor interest, strong fundamentals and a credible product. The next step is scale.”

So while some investors prefer to “chase the gold rush” through pawnbroker stocks, others are happy to hold the precious metal itself — or its paper equivalent. What is for sure is that gold is here to stay, and Malaysia is waking up to the convenience of ETFs as a gateway. 

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