Take the following ETFs: L&G Gold Mining ETF (LSE:AUCP) and iShares Digital Security ETF (LSE:LOCK). These funds have enjoyed an excellent average annual return of 16.2% during the last five years.

The question is, can these popular products continue delivering excellent returns?

Striking gold

Gold’s stunning price surge has grabbed significant media attention in 2025. But the yellow metal’s rush to new record highs is no new phenomenon.

Indeed, gold’s on a multi-year bull run that’s driven funds like the L&G Gold Mining ETF through the roof. This particular product’s delivered an average yearly return of 19.1% over the last five years.

This reflects in large part the ‘leverage’ effect the fund benefits from. It’s risen more sharply than gold itself, reflecting the fact that miners’ profits can explode when gold prices increase.

In total, this fund holds shares in 36 different gold miners. This includes industry heavyweights like Newmont, Angico-Eagle, and AngloGold Ashanti. These are businesses with large project portfolios, a quality that spreads out (if not totally eliminates) the threat of production stoppages on overall returns.

Can gold prices continue rising, though? I think they can, supported by macroeconomic factors (like a depreciating US dollar, interest rate cuts, and trade tariffs). Growing geopolitical tensions could also drive the safe-haven commodity to fresh peaks.

Security guard

Concerns over whether an AI bubble has formed continue to weigh on technology stocks. One tech segment that I don’t think faces the same danger is cybersecurity.

This is why I’m confident the iShares Digital Security ETF can continue deliver stunning returns. Its average yearly return since November 2020 is 13.2%.

Cyberattacks are becoming more numerous and increasingly severe. The massive attack on Jaguar Land Rover that took a huge chunk out of Q3 GDP underlines the scale of the threat.

With bad actors increasingly using AI, and state-supported intrusions also becoming more commonplace, having robust online defences is becoming increasingly critical.

Reflecting this, analysts at Global Market Insights reckon the global cybersecurity market will more than double in size over the next decade, to $55bn.

The iShares Digital Security fund provides a well-diversified way for individuals to target this opportunity. It includes industry heavyweights like CrowdStrike, Cloudflare, and Palo Alto alongside smaller players. These are businesses with excellent brand power, strong records of innovation, and deep pockets for future R&D.

A high-profile systems failure can shatter a security provider’s prospects overnight. This fund, which has holdings in more than 100 different tech stocks, substantially reduces this risk for investors.

Information technology earnings can be highly cyclical. As such, returns from this iShares ETF could disappoint during economic downturns. But over the long term I expect it to continue outperforming.

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There are no guarantees that gold will keep rising. But here are three reasons why it could.

1. Lasting uncertainty

Surging demand for safe-havens has driven bullion sharply higher in 2025. It’s been propelled by a range of factors including rising inflation, interest rate cuts, growing government debt, weak economic growth, and fears over US stock valuations.

Geopolitical concerns, including the volatile political landscape in the US and the potential for fresh global conflicts, have boosted the metal’s flight-to-safety appeal as well.

Some (if not all) of these uncertainties look set to endure, providing the perfect landscape for gold to thrive. This week, Kristalina Georgieva — managing director of the International Monetary Fund (IMF) — warned us to “buckle up: uncertainty is the new normal and it is here to stay“.

2. Central bank buying

It’s not just retail and institutional investors who are piling into gold. Central banks are also loading up on bullion to diversify their international reserves and to manage risk. It’s also part of a drive by many institutions to reduce their US dollar exposure.

In June, nine out of 10 central bank officials told the World Gold Council (WGC) they expect banks’ total reserves to increase over the following 12 months. In line with this trend, Andre Wameso — head of Democratic Republic of Congo’s central bank — told Reuters this week of the African country’s plan to start buying gold.

3. The drooping dollar

A steady decline in the US dollar also bodes well for gold prices looking ahead. This has already been a major catalyst for the metal in 2025, caused by growing inflation, interest rate expectations, and worries over the independence of the Federal Reserve.

The falling greenback has made it more cost-effective to buy dollar-denominated commodities like precious metals. Declining confidence in the US dollar has also indirectly benefitted gold, by encouraging investors to switch from the classic safe-haven currency into other flight-to-safety assets.

The US dollar fell at its sharpest rate for 50 years in the first half in 2025. I think there’s scope for further significant weakness.

How to profit from gold

Investors can buy physical gold like bars, coins, and jewellery to capitalise on rising prices. They can also invest in exchange-traded funds (ETFs) that track the performance of the shiny metal.

They can also purchase gold stocks, which is what I’ve personally chosen to do. I’ve done this by buying the L&G Gold Mining (LSE:AUCP) ETF, which holds a basket of metal producers.

This is a risker approach than just tracking the gold price. Gold miners’ returns can underwhelm if they experience operational problems, an ever-present danger. But my ETF holds shares in 37 different companies, which reduces this threat to my overall returns.

It’s a strategy that can lead to supersized gains, as producers’ profits often rise more sharply than the gold price during bull markets like this. While gold has gained 53% in 2025, the L&G Gold Mining ETF has gained 122%. This makes it far more appealing to me from a risk and reward standpoint.

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There’s no guarantee gold will keep rising. However, long-term drivers indicate this rally is no flash in the pan, unlike with more volatile assets like cryptocurrencies. The bull run stretches back to 2005, boosted by forces such as inflation fears, rising geopolitical tensions, and strong investor and central bank demand.

Analysts see scope for further juicy gains too, on the back of US-specific risks alone. Analyst Arnab Das of Invesco has said “we think the gold rally has legs even from record highs,” noting that gold is now rising as the US creates risk in efforts at radical domestic and global reform; US growth slows, inflation is sticky; the administration attacks the Fed and other institutions; and DXY (the US dollar index) falls.

Das added that “we see no true alternative to gold as a hedge against US risks and expect central banks to keep buying gold.”

Choosing gold shares

With other macroeconomic and geopolitical risks spooking investors, opening a position (or boosting existing exposure) in the yellow metal is worth serious consideration in my book.

I’ve done this myself by purchasing the L&G Gold Mining ETF (LSE:AUCP) — which holds shares in 37 different metal producers — for my portfolio. Tracking gold stocks instead of the metal price itself carries greater risk. But this tactic also carries significant growth potential during bull markets.

The rise of the NYSE Arca Gold Miners Index in 2025 illustrates the potential benefits. It’s almost doubled in value since New Year’s Day.

This outperformance reflects the operating leverage that miners enjoy. Their production costs are generally fixed, and so every small rise in the gold price goes straight to their bottom lines, leading to profits that grow faster than revenues.

A top ETF

That L&G exchange-traded fund (ETF) I hold has risen 107% in value since 1 January. And I believe it can keep rising for the reasons described.

As I mentioned, investing in gold stocks is riskier than tracker funds or physical metal. Even if bullion rises, returns can disappoint if producers suffer setbacks pulling ore out of the ground, for instance, or suffer other operational issues.

However, with a broad portfolio the L&G Gold Mining ETF spreads this risk out. Major holdings (like Newmont, Agnico Eagle and Gold Fields) enjoy significant scale and financial strength that helps them weather setbacks too.

And with mines spanning the globe — including major gold-mining regions in The Americas, Australia and Africa — the fund’s portfolio is geared to cut the risks of regional problems pulling down returns.

The ETF has delivered an average annual return of 13% during the last half a decade. I like the way it balances risk and reward, and plan to hold it for the long haul.

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The yellow metal’s latest upswing is being driven by speculation over Federal Reserve interest rate cuts and the future independence of the US central bank. Further gains are widely expected — JPMorgan has tipped gold prices to average $3,675 by the fourth quarter, and $4,000 by the middle of 2026.

The omens look good for gold stocks and funds, although of course, further price rises cannot be guaranteed. Here are three to consider in the current market.

The easy route

The simplest way is to purchase an ETF that owns physical gold (in this case, bars that are locked up in vaults). This saves investors the trouble of having to store and sell the metal themselves. It also removes the need for them to buy gold-producing shares to get exposure to the precious metal.

The iShares Physical Gold (LSE:SGLN) is one I think demands serious attention. It’s the UK’s largest gold fund, with total assets above $18.7bn, and enjoys exceptional liquidity, making it easier for investors to open and close positions.

Furthermore, its total expense ratio is a very attractive 0.12%. Only the Xtrackers Physical Gold fund has a lower cost (0.11%).

But remember that prices may naturally fall if gold reverses course.

A cheap gold stock

As I say, individuals can also capitalise on buoyant gold prices by considering shares in metal producers. Brazilian miner Serabi Gold (LSE:SRB) is one that’s caught my eye.

Holding gold shares is riskier than physical metal or bullion-backed ETFs. They can fall when gold prices fall, and also if operational problems occur. Serabi, for instance, could retrace if its drive to double production over the next few years encounters issues.

However, this strategy can also mean higher returns, as producer profits can rise far more sharply than the gold price during bull markets. What’s more, holding gold shares can also provide an added bonus of dividend income. The dividend yield at Serabi is a solid 3.8%.

Today the shares trade on a forward price-to-earnings (P/E) ratio of 3.9 times. This cheapness provides substantial scope for further price rises, in my view.

Best of both worlds

There are clearly advantages and disadvantages to buying gold-tracking funds and bullion-producing shares. I think one attractive way to balance the risk and reward of both options is to look for an ETF than holds shares in many different gold companies.

This is a strategy I’ve actually chosen myself by buying the L&G Gold Mining ETF (LSE:AUCP). This fund holds shares in 37 different gold companies, which helps reduce the impact of shocks experienced by individual companies on shareholder returns. But it doesn’t eliminate those risks, of course.

I like this particular fund because of its focus on larger mining companies like Newmont Mining and AngloGold Ashanti. These businesses tend to be much more stable than junior miners, while still providing the possibility of substantial capital gains.

It’s delivered an 80.6% return over the last 12 months. That’s substantially better than the 38.9% increase that gold prices have enjoyed over the period.

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Bouncing back

Gold’s rise to record peaks in 2025 was driven by fears over US trade policy. At $3,500 per ounce, the precious metal surged as markets worried about crushing tariffs and their impact on global growth and inflation.

The threat hasn’t gone away, but its impact on gold prices is greatly diminished. As we’ve seen in recent hours, markets seem accustomed to tough words on tariffs from President Trump before the White House sounds the retreat.

Does this mean gold’s bull run is over? Not in my book, as there are plenty of other factors that could drive the safe haven to new peaks. These include falling interest rate cuts, a weakening US dollar, and rising geopolitical tensions in the Middle East.

A fine fund

Modern investors have a multitude of options if they want to capitalise on a rising gold price. The first option is to purchase physical gold like bars or coins. The advantage is that investors have 100% control over the asset. However, buying and selling actual metal can be more complicated than other options, and can attract storage costs.

Another possibility is to buy a price-tracking ETF. The problem here however, is that — as with owning physical bullion — individuals don’t receive an income. They only benefit from a rise in the value of the shiny commodity.

To get around this, individuals can purchase an ETF that holds a basket of gold stocks. This is a path I’ve chosen with the L&G Gold Mining (LSE:AUCP) fund, which owns shares in 38 different bullion producers.

Some of the companies it holds (like AngloGold Ashanti, Kinross Gold and Newmont) pay a regular dividend to their investors. This is then reinvested back in the fund for further growth. Another advantage is that miners’ profits can rise faster than the gold price due to the leveraged effect.

The downside is that ETFs like this expose investors to the unpredictable. Though with holdings in a spectrum of different companies, the risk associated with this is reduced (if not totally eliminated).

Another golden opportunity

The final option investors have to play the gold market is to directly buy shares themselves. One that’s caught my eye is Serabi Gold (LSE:SRB).

Buying individual mining shares carries even greater risk due to a lack of diversification. But I think this could be baked into the cheapness of Serabi shares today. At 172.5p per share, the African miner trades on a forward price-to-earnings (P/E) ratio of 3.3 times. This reflects forecasts that annual earnings will rise 87% in 2025.

On top of this, Serabi’s forward dividend yield is a large 5.5%.

I think both this gold stock and the earlier gold ETF are worth consideration right now. In the case of Serabi, now could be a great time to take a look given its impressive recent operational performance.

Gold production rose 11% between January and March, to 10,013 ounces. And all-in sustaining costs (AISCs) dropped 12% to $1,636 per ounce, well below the current gold price.

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Here’s why.

Race for gold

Up 43% over the last year, the L&G Gold Mining ETF (LSE:AUCP) has been swept higher by the surging precious metal price. While down from April’s record high above $3,500 per ounce, I’m confident gold will stride to new peaks as geopolitical and macroeconomic tensions grow.

It should also receive support from a falling US dollar, which endured its worst six month period since 1973 between January and June.

Retail and institutional demand for gold has exploded as investors have sought safe-haven assets. As the following Gallup poll shows, gold is now considered a better long-term investment than shares among US investors, for instance. Personally, I’m still buying shares, but a gold stock feels like it might be the best of both worlds!

At the same time, bullion demand from the world’s central banks is also steadily increasing. These institutions bought a further 20 tonnes of yellow metal in May, according to the World Gold Council (WGC).

Leveraged play

Getting back to that L&G fund, it provides a way to capitalise on rising prices by holding shares in 38 gold mining companies. These include industry heavyweights like Agnico Eagle and Newmont Mining, alongside smaller operators in the exploration or early production stages.

In theory, such companies have significantly more long-term growth potential, although they also carry greater risk of failure.

The advantage of owning a gold miner ETF like this is that investors can turbocharge their returns when metal prices rise. This is because they offer leveraged exposure — a miner’s earnings may increase more rapidly than the gold price, as their costs stay relatively fixed while their revenue rises. Consequently, their share prices can rocket.

Another perk is that the fund receives dividends from a number of of the companies it owns. It then reinvests this to achieve further growth. Conversely, gold bars, coins, or price-tracking funds don’t provide income to their holders.

A top fund

The disadvantage of funds like this, however, is that the leveraged aspect can backfire when gold prices drop.

This isn’t the only potential problem either. Indirectly holding mining shares exposes investors to production risks, unlike physical metal or gold price ETFs. Operational issues can reduce company profits, causing the fund to underperform even when gold appreciates.

But on the plus side, the fund’s diversification across dozens of miners may substantially the impact of such problems on overall returns.

Furthermore, almost 70% of the fund is invested in its top 10 holdings, which are predominantly large-cap miners. Companies like this are in a strong position to absorb operational setbacks, providing the fund with added stability.

While not without risks, I think this gold fund is worth serious consideration in the current climate.

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SIPP investors can mitigate their risk effectively by purchasing pooled investments like exchange-traded funds (ETFs) and investment trusts. These have the ability to spread individuals’ wealth across a range of holdings, which can help them diversify across industries, regions, and asset classes.

With this in mind, here are two top ETFs and investment trusts to consider in June.

Discount trust

Renewed market appetite means FTSE 100 investment trust Alliance Witan (LSE:ALW) is no longer trading at the whopping discount that it was just a few weeks ago.

However, its shares — at £12 — are still almost 5% cheaper than the investment trust’s net asset value (NAV) per share of £12.85. This chunky discount offers a tasty bonus for investors.

Alliance Witan is one of the UK’s oldest and largest trusts, with around £5.1bn in assets. It’s been around for more than a century thanks to its ability to generate excellent returns (its average annual return over the last five years is 11.5%).

I think it’s a great way to diversify because its portfolio of 231 shares span a multitude of industries and different continents. Major holdings include Microsoft, Unilever, Safran, and Petrobras.

It may be more volatile in the near term than trusts that focus on more stable assets (like bonds). But Alliance Witan’s long-term record still makes it worth serious consideration in my book.

Going for gold

Investing in ETFs is now the second-most popular way to get exposure to gold. According to retailer The Gold Bullion Company, almost one in five (17.5%) people tap into the yellow metal via one of these pooled instruments.

That makes it the second-most popular option behind gold jewellery (20.1%) but ahead of gold coins (13.4%).

I have exposure to gold myself through one of these pooled instruments. But rather than buying one that simply follows the gold price, the one I hold — the L&G Gold Mining ETF (LSE:AUCP) — tracks the performance of numerous bullion producers (34 in all).

This has two large advantages for me. It allows me to receive a passive income in the form of company dividends. Also, mining companies enjoy operational leverage — their costs remain relatively stable over time, meaning their profits can grow faster than bullion values during bull markets.

Heavy profit taking and revived demand for riskier assets has toppled gold from recent record highs above $3,500 per ounce. But I’m confident it can reclaim new heights, making now a good time to consider gaining exposure. Enduring macroeconomic and geopolitical uncertainty and sustained US dollar weakness could remain significant drivers.

On the downside, the L&G Gold Mining ETF exposes investors to the unpredictable nature of metals production. However, its wide range of holdings (including industry giants Agnico-Eagle Mines and Newmont) helps to limit this risk.

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The price tracker

Gold prices reached record peaks above $3,500 per ounce on 22 April, but have since retraced to around $3,276.38. Yet gold is still up around 25% this year, and looks (in my view) in good shape to rise again after recent profit taking.

Inflows into gold-backed ETFs like the iShares Physical Gold ETF (LSE:SGLN) have been a key factor behind the bullion’s price jump this year. According to World Gold Council data, global holdings jumped 226 tonnes during the first quarter. This took total ETF holdings to 3,445 tonnes in March — a near-two-year high.

The WGC’s predicted “continued momentum in gold ETF flows” for the rest of 2025 too, “on risks of stagflation and recession, and ongoing geopolitical and trade tension“.

So funds like iShares Physical Gold remain top assets to consider in May. I like this particular fund, the UK’s largest with net assets of £16.9bn, as it also has one of the lowest ongoing expense ratios in the business (at 0.12%).

In the past five years, the fund has delivered an average annual return of 14%. I think this could pick up worries over the economic and political landscape mount, and the US dollar likely weakens still further, making buck-denominated assets more cost effective to buy.

Remember though, that there are no guarantees. For instance, an improvement in investor confidence that spurs rotation into riskier assets (like shares and cryptocurrencies) could weigh on safe-haven gold values.

The gold mining ETF

Investors with a high tolerance for risk may wish to consider a fund that tracks the performance of gold miners instead. This is a route I’ve gone down as I recently added the L&G Gold Mining UCITS ETF (LSE:AUCP) to my Self-Invested Personal Penson (SIPP).

Unlike a basic price-tracking fund, ETFs like these leave holders exposed to the dangers associated with gold mining operations. These include production disruptions, adverse currency fluctuations and political challenges in key mining areas.

Yet while involving greater risk, mining funds can also deliver far better returns, as a small gold price increase can lead to a much greater rise in company profits. Performance is also boosted by miners’ dividends, which are reinvested to achieve further growth.

This particular L&G product has delivered an average annual return of 18.9% during the last five years, beating that iShares gold price tracker described above.

By investing in 34 different miners, the fund reduces the impact of challenges impacting one or two companies on overall returns. It also holds some of the best (in my opinion) bullion producers in the business like Agnico-Eagle, Newmont and AngloGold Ashanti.

The ongoing charge of 0.55% is higher than that of most ETFs that track the gold price. But I believe the potential for more superior returns make this a price worth considering.

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More specifically, my plan was to capitalise on gold’s impressive bull run by increasing my existing exposure. Its up 27% over the past year, and is being tipped for further substantial gains.

But instead of buying the metal itself, or an exchange-traded fund (ETF) that tracks bullion prices, I opened a position in a fund that mirrors the performance of gold stocks.

Here’s why I just added the L&G Gold Mining UCITS ETF (LSE:AUCP) to my portfolio.

Big benefits

Investing in gold miners can have significant advantages over simply owning physical metal (or a gold-price-tracking fund).

First of all, they offer leveraged exposure to the gold market, which during periods of strong metal prices can deliver far greater returns.

This is why. If gold prices appreciate more than 5%, a producer’s profits may increase more than this because their costs stay relatively fixed while their turnover rises. This can prompt their share prices to increase even more sharply than the gold price.

A gold stock may also outperform bullion prices during periods of strong operational performance. And unlike physical gold or a gold-tracking fund, mining stocks and mining stock ETFs also often provide dividend income.

The L&G Gold Mining ETF is an accumulation fund, meaning dividends from its underlying holdings are automatically reinvested to achieve further growth.

Strong performance

There are many gold producer ETFs I could have chose from. But I plumped for this Legal & General one because of its market-leading returns:

Source: justETF

I’m optimistic it can continue outperforming rival funds too, thanks to the way it’s structured. For instance, some 14.3% of the fund is invested in Agnico-Eagle Mines shares, making it the fund’s single largest holding.

The Canadian company is one of my favourite sector players. As Edison analysts explain, Agnico-Eagle “has delivered earnings per share growth approximately 30% greater than gold’s price movement” between 2010 and 2024.

The bottom line

That said, there are risks to owning a gold producer ETF like this. Leveraged exposure means losses can be amplified should gold prices fall. What’s more, purchasing mining stocks directly or indirectly exposes investors to the inherently challenging nature of metals extraction.

But on balance, I believe it could be a highly profitable investment for me. Growing economic and political challenges, allied with a worsening outlook for the US dollar, mean bullion prices look in good shape to keep climbing, I feel.

And with holdings in 34 different companies, the fund allows me to effectively spread risk across the mining sector.

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