Bullion-backed Gold ETFsBullion-backed gold ETFs are structured as grantor trusts in which investors are considered to own undivided interests in the gold owned by the ETF. SPDR Gold Shares ( GLD), the largest example of a gold bullion-backed fund, is currently the second largest ETF when measured by assets. Other bullion-backed gold ETFs include iShares Comex Gold ( IAU) and ETFS Gold Trust ( SGOL). Since investment in a bullion-backed ETF is treated as ownership of physical gold, ETFs like GLD, IAU and SGOL are taxed at the same maximum tax rate of 28% rate as collectibles (gold bars, baseball cards, etc.). If an investor buys a bullion-backed gold ETF and holds it for more than one year, sale of the fund will be subject to the maximum tax rate of 28%. If an investor buys and sells shares of a bullion-backed ETF within one year, the investment is subject to ordinary income rates. Investors may also be surprised to learn that they may incur gains or losses even if they simply buy and hold the fund. If an ETF like GLD or IAU sells gold to pay expenses, a common practice, the gains and losses of these sales are passed on to the investors. While investors do not receive distributions, they must include their share of profits in gross income, taxable at 28%.