With the variety of economic woes still troubling the markets, gold has continued to shine; investors still can't get enough of the yellow stuff. Functioning as both a safety net and inflation hedge, most financial advisors now recommend some allocation to the precious metal and investors have taken the advice to heart.

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Several gold funds have seen their assets swell, as prices for the yellow metal have surged over the last few years. With demand continuing to increase from both developed and emerging market investors, the long term price appreciation for gold could almost be assured. Now could be the time to add metal to a longer timed portfolio.

The Big Boys on the Block
With nearly $65 billion in net assets, the SPDR Gold Shares (NYSE:GLD) is the 800-pound gorilla in the gold world and has become the go-to choice for bullion exposure, for many institutional and retail investors. For those wanting to gain from the additional leverage of mining firms, both the Market Vectors Gold Miners ETF (NYSE:GDX) and Market Vectors Junior Gold Miners ETF (NYSE:GDXJ), have nearly $11 billion in assets under management, split between them.

These three funds make up the bulk of investors' dollars in the space. While there is nothing inherently wrong with these ETFs, in fact they're pretty good, investors looking at the gold space tend to stop searching for opportunities at these funds. However, a discussion of gold funds doesn't need to stop with these three behemoths. For those looking for gold exposure, these alternative funds could be better portfolio fit. (For related reading on ETFs, see Using ETFs To Build A Cost-Effective Portfolio.)

Exploring the Alternatives
Currently, there are more than twenty ways for investors to get their gold fix, via exchange traded products, and new gold-based funds are still in the works. As the fund industry has continued to advance, providers have continued to create sophisticated new products. Innovation in the gold sector has not been lost. Investors have a number of options for achieving exposure to gold futures, mining stocks and complex strategies. Here are a few new options to consider:

The RBS Gold Trendpilot ETN (Nasdaq:TBAR) is an interesting fund choice for investors. The fund switches between exposure to gold or Treasury bills, depending on whether gold prices are above its 200-day moving average. While do-it-yourselfers could use the GLD and the SPDR Barclays Capital 1-3 Month T-Bill ETF (NYSE:BIL) to replicate the strategy, the set-it-and-forget-it notion is certainly appealing for many investors. Similarly, the UBS E-TRACS S&P 500 Gold Hedged Index ETN (Nasdaq:SPGH) tracks an index that equal weights exposure to the S&P 500 and gold prices. Overall, both funds have performed well, versus the S&P 500 and gold prices.

One of the major drawbacks to the physically backed funds is the issue of taxation. Counted as collectibles, long-term gains in these funds are taxed at 28%, instead of the usual capital gains rate of 15%. Exchange traded notes could circumvent this problem. Both the UBS E-TRACS CMCI Gold TR ETN (NYSE:UBG) and PowerShares DB Gold Double Long ETN (NYSE:DGP) can be used by investors as way to profit from gold futures pricing. The PowerShares fund also adds leverage to the mix and has skyrocketed, as gold prices have soared.

The majority of the bullion stored by the big gold ETFs is located in New York and London. With visions of Executive Order 6102 still dancing in their heads, some investors feel uneasy about this. The ETFS Physical Swiss Gold Shares (Nasdaq:SGOL) and ETFS Physical Asian Gold Shares (Nasdaq:AGOL) store their gold in Switzerland and Singapore, respectively. Despite their exotic locales, both ETFs actually charge less in expenses, than the popular GLD.

The Bottom Line
With investors' interest in gold continuing to rise, the ETF industry continues to pump-out new products for investing in the sector. For many investors, these new products could provide great alternatives to the standard bread and butter funds. The previous ETFs, along with the PowerShares DB Gold (NYSE:DGL) make interesting selections. (For additional reading, take a look at Two Golden Funds From Global X.)

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

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