Putting gold into an investment portfolio has never been simple. Owning the metal itself is subject to high storage charges; gold futures contracts need to be rolled over regularly, meaning never-ending trading commissions, and stocks of gold producers, which are influenced by the overall equity market as well as each company’s hedging strategies, are imperfect substitutes for bullion at best. Now, however, gold bugs have a new play that seeks to solve this long-running quandary. In November, the first low-cost exchange traded fund that represents interests in bullion stored in a bank’s coffers made its debut. A second ETF is waiting in the wings.

The first gold ETF, dubbed streetTracks Gold Shares, hit the market on Nov. 19, trading on the New York Stock Exchange under the symbol GLD. The ETF is backed by the World Gold Council, an industry group based in Switzerland. State Street Global Markets will market the ETF shares, and HSBC Bank will serve as the custodian for the bullion in the program. Barclays Global Investors, the leading ETF provider, is backing a competing ETF, which is still undergoing Securities & Exchange Commission scrutiny. The BGI product, which is expected to be out by yearend, is called iShares Comex Gold Trust. It is slated for listing on the American Stock Exchange as IAU.

Both ETFs’ shares represent ownership of one-tenth of an ounce of bullion. The price of the streetTracks ETF will be based on the value of an ounce of gold as determined by the daily afternoon London gold price fixing. The iShares ETF price will be based on the price of spot month gold futures on the Comex exchange in New York. According to SEC filings, both ETFs will charge a fee equivalent to 0.4% of assets.

While streetTracks Gold Shares allows investors to trade ETFs as if they were equities, they will not qualify for the 15% federal capital gains rate. Because the Internal Revenue Service classifies bullion as a “collectible,” gains on ETFs held for more than a year will be taxed at 28%.

Amid rising global political stress and a stock-market wipeout, the price of gold has risen by more than a third since the late 1990s, to more than $400 an ounce. Demand, however, has declined by 23% between 1997 and 2003, according to industry statistics.