With the stock market bucking up and down faster than a mechanical bull, investors have looked for safe havens to protect their money. One of the most widely followed safe havens has been gold, which has seen its price steadily rise for more than a decade.

With the rise in gold's popularity, investors have looked for smart ways to invest in the yellow metal. The most popular gold investment is the SPDR Gold Trust ETF (NYS: GLD) , which briefly became the largest exchange-traded fund in existence last month. But some believe that shareholders in the SPDR gold ETF are paying more than they need to for their gold exposure -- and those costs could rise in the months ahead.

The cost of solid gold
Like any ETF or mutual fund, investors pay costs to own shares of the SPDR gold ETF. Currently, investors pay annual fees of 0.4% on their shares, which go to cover the costs of buying, selling, and storing bullion, as well as the fees of those who manage and market the fund.

However, there's potential trouble on the horizon, as this fee could go up as early as November. At that time, the fund's fee reduction agreement is set to expire, and as the fund's prospectus warns, fees could rise after expiration. Over the past three years, this provision has reduced expenses of the fund by a total of more than $1.8 million.

More importantly, SPDR gold shareholders arguably aren't getting the best deal for their money even with the fee waiver in place. Consider these alternatives.

1. iShares Gold Trust (ASE: IAU)
The iShares equivalent to SPDR Gold isn't a carbon copy, but it's pretty close. Unlike shares of SPDR Gold, which represent roughly a tenth of an ounce, each iShares Gold share is worth about a hundredth of an ounce. So to get the equivalent exposure, you have to buy 10 times as many iShares ETF shares as you would SPDR Gold shares.

The benefit, though, is that iShares only charges 0.25% annually in fees. That's somewhat surprising, given that the fund is much smaller and therefore should have less economy of scale than the SPDR ETF. Nevertheless, with a similar mandate, the shares are functionally identical.

2. Central Fund of Canada (ASE: CEF)
Unlike the SPDR and iShares ETFs, this closed-end fund doesn't only own gold bullion. At current prices, Central Fund has its assets split almost evenly between gold and silver bullion. At an expense ratio of 0.34%, however, it's less expensive than the SPDR gold ETF.

Even better, though, is the fact that Central Fund has been able to avoid the steady dilution of value that its ETF counterparts have experienced. That's because Central Fund has successfully made secondary offerings of shares over the years at prices above the net asset value of the bullion it holds. In other words, rather than having new offerings dilute existing shareholders, they've actually enhanced shareholder value, as new shareholders have been willing to pay more than the bullion underlying them is technically worth. That may not hold true forever, especially as the shares' premium has just about disappeared. But up until now, it's been a boon for Central Fund investors.

The physically backed Sprott Physical Gold Trust ETV is in much the same situation, trading at about a 5% premium to its net asset value. Some prefer its convertibility to bullion as insurance against a catastrophic event that would wipe out paper assets, but for those who merely expect normal price appreciation, the shares should track gold prices similarly to the iShares and SPDR ETFs.

3. Mining stocks
Before bullion ETFs were available, the usual way to get gold exposure was to buy gold mining stocks. Although miners face company-specific risks that don't necessarily perfectly correlate with gold prices, big producers including Newmont Mining (NYS: NEM) , Barrick Gold (NYS: ABX) , and Goldcorp (NYS: GG) have tracked gold prices fairly well over the long haul.

If you don't want to pick individual stocks, then mining ETFs are also available, such as Market Vectors Gold Miners (ASE: GDX) . But the fees on some of these ETFs are even higher than the bullion ETFs, making shares of individual companies a better bargain.

Why pay more?
In the grand scheme of an asset that has risen more than 600% in the past decade, quibbling about fractions of a percent in annual fees may seem silly. But every little bit means more money in your pocket. Whether gold keeps soaring or falls back to earth, you'll be happier finding the cheapest way to invest in the precious metal.

There's a tiny gold stock that's digging up massive profits. Find out more about it in this free special report from The Motley Fool.

At the time this article was published

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