Investing in gold shares, specifically in gold mining companies, offers distinct advantages over ETFs or mutual funds. One key benefit is the potential for greater returns. While ETFs and mutual funds track the price of gold, gold shares can outperform the metal itself if the mining companies manage to reduce costs or find new reserves, boosting profitability.

Gold shares also provide exposure to the company’s dividends, which ETFs and direct investments in gold don’t offer. Many gold mining companies pay dividends, allowing investors to generate income alongside potential capital appreciation.

Another advantage is the opportunity to leverage the growth of individual companies. If a mining company improves its operational efficiency or expands production, its stock can rise significantly, offering returns beyond what a passive investment in gold might yield.

Additionally, investing in gold shares can provide diversification within the gold sector. ETFs and mutual funds typically pool investments across multiple companies, while gold shares allow you to target specific firms with different risk and reward profiles.

However, gold shares can be more volatile and carry more company-specific risks, such as management decisions or operational challenges, compared to the broader exposure of ETFs or mutual funds. Therefore, they are suited for investors seeking more direct, higher-risk, higher-reward exposure to the gold market.