If You're A Retiree Looking To Ride The Gold Rally Then Consider This ETF
IGLD Gives You Diversification & Income
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Current Price: $26.70
Portfolio Purpose: Income
With geopolitical tensions rising, a steadily weakening U.S. dollar, persistent inflation fears, surging national debt, and tariff-driven uncertainty, it’s no surprise that precious metals have surged in recent years.
Gold (GLD) recently hit another record before pulling back and currently trades around $4,845 per ounce.
Before the end of 2026, I believe gold could push above $6,000.
For retirees who prioritize income but still want exposure to gold’s upside, the FT Vest Gold Strategy Target Income ETF (IGLD) offers a compelling solution. It provides monthly income while allowing investors to participate in the gold rally—without owning physical gold outright.
In this article, I’ll revisit IGLD’s strategy, review its performance, and explain why I believe it’s particularly well-suited for retirees.
Revisiting the Thesis 🔄
I last covered IGLD in September in an article on Seeking Alpha titled “Get The Best Of Both Worlds: A Unique Blend of Safety and Monthly Income.” Since then, the ETF has performed well, largely driven by gold’s continued strength.
Despite recent volatility in precious metals, IGLD has delivered a total return of nearly 18%, significantly outperforming the broader market.
Over the same period, the S&P 500 (SP500) is up less than 5%. Even more impressive, IGLD has outperformed the index over the past one- and three-year periods, reinforcing my view that this strategy works well during uncertain macro environments.
Given rising economic volatility, I continue to believe IGLD can outperform while delivering steady, reliable income.
Understanding IGLD’s Strategy ⚖️
IGLD uses a synthetic covered-call strategy rather than holding physical gold. Specifically, it writes options against the SPDR Gold Shares ETF (GLD) to generate premium income, while also holding Treasury bills for added income stability.
This approach differs from peers like NEOS Gold High Income ETF (IAUI), which maintains exposure to physical gold through the Goldman Sachs Physical Gold ETF (AAAU).
While some investors prefer physical gold exposure, IGLD’s objective is different: income first, upside second.
In my view, it has executed that mandate effectively.
Key Mechanics 🔑
Low overwrite ratio (~23%) allows for greater capital appreciation than many covered-call peers
Short-dated (1-month) ATM calls generate consistent monthly income
Rolling options “up and out” helps adapt to changing price levels
Short put options provide limited downside protection
Occasional use of FLEX options allows customized strikes and expirations
In December alone, IGLD captured roughly 77% of GLD’s upside, demonstrating that the strategy does not fully sacrifice growth for income.
Comparing IGLD to GDXY and IAUI 📊
IGLD’s strategy is somewhat similar to YieldMax Gold Miners Option Income Strategy ETF (GDXY), which writes both short- and long-dated calls against the VanEck Gold Miners ETF (GDX).
However, GDXY pays weekly distributions and currently yields over 80%—a figure that looks attractive but has come at the cost of significant NAV erosion.
Despite GDXY’s higher yield, IGLD has slightly delivered superior total returns since GDXY’s inception in May 2024, thanks to better capital preservation and growth.
Let’s compare IGLD and IAUI:
IAUI’s higher yield is appealing, but it also caps upside more aggressively, which helps explain IGLD’s outperformance despite the lower distribution rate. For context, IAUI is only 8 months old so I compared their performances in the past 6 months.
How IGLD May Perform Going Forward ↗️
If gold continues to trend higher in 2026—as I expect—IGLD should continue to deliver attractive total returns.
Bull markets: IGLD should rise but likely underperform GLD due to capped upside. The tradeoff is consistent income.
Flat or volatile markets: This is where IGLD shines. Higher volatility increases option premiums, supporting stronger distributions.
Bear markets: IGLD may still experience NAV declines, as covered-call ETFs generally absorb most downside. However, elevated income can partially offset price weakness.
So far, the results have been encouraging. IGLD has posted double-digit NAV growth over one- and three-year periods, along with strong recent performance.
Tax Considerations 🗂️
One drawback to note: IGLD’s distributions are taxed as ordinary income, unlike IAUI, which primarily distributes return of capital (ROC).
ROC is more tax-efficient, as it defers taxes until shares are sold.
This makes IGLD best suited for:
Tax-advantaged accounts (IRAs, Roth IRAs)
Retirees already withdrawing income, where tax deferral is less relevant
Risks ⚠️
Gold’s rapid rise means a sharp correction is always possible. If gold fails to reach my $6,000 target by year-end or enters a prolonged pullback, IGLD’s returns would be affected. While the ETF won’t match gold’s full upside, it also doesn’t require perfect timing to be effective.
Bottom Line ✅
For retirees, IGLD offers:
Monthly income above 9%
Reasonable expense ratio below 1%
Partial participation in gold’s upside
A diversifying income stream during uncertain markets
With geopolitical risks, fiscal pressures, and inflation concerns likely to persist into 2026, I remain bullish on precious metals.
As a result, I believe IGLD has strong potential to outperform the broader market for a fifth consecutive year.
Where do you think Gold will be at the end of the year? Let me know in the comments.
Happy Investing!
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Not financial advice. For educational purposes only. I am not a licensed professional. Do your own due diligence.
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