There’s a distinct allure to owning precious gold coins. But, for first time investors with smaller budgets, the cost of a single 1 oz gold Britannia – over £1 300 – can be quite daunting. Lower priced fractional coins offer a more affordable way to start your gold coin collection.
What are fractional gold coins?
Fractional coins are smaller versions of popular gold bullion coins like Krugerrands, Maples, Eagles and Britannias. They literally contain a fraction of the gold content of the full 1 oz coin – commonly 1/2 oz, 1/4 oz or 1/10 oz of pure gold.
Weight for weight, fractional coins cost a little more. This is because the cost of producing them is the same as for coins containing more gold. You can expect to pay between 9-15% over the spot price of gold for fractional coins. Even so, you can pick up a 1/10 oz gold Britannia for just over £150, which makes them ideal for people who prefer to regularly invest smaller amounts. Many seasoned investors also believe that a combination of 1oz and fractional coins make for a more flexible and well rounded portfolio.
Advantages of fractional coins
Because of their lower cost, fractional coins are typically easier to sell or barter. They are also more flexible if you need to convert your gold into small amounts of cash. You can sell just a portion of your investment, instead of having to liquidate a coin worth over a thousand pounds.
If you’re collecting gold coins for their beauty and history as well as their value, choosing smaller sizes allows you to buy more different coins for your money. Canadian Maples, Austrian Philharmonics, South Afrcian Krugerrands and Australian Kangaroos are all worth a look.
But if you live in the UK, there’s a distinct advantage to buying Britannias. All of these gold bullion coins – including fractional coins – are sold VAT free in the UK and are exempt from Capital Gains Tax for British residents.
Fractional coins make affordable, yet impressive wedding or 21st birthday gifts. The smaller coins are also commonly mounted in jewellery items like pendants, bracelets, and even men’s signature rings. Ideal for those who like to show off their gold collection, rather than keep coins hidden away at home.
Fractional Britannias are relatively new on the market. The first fractional coins issued by The Royal Mint were struck in 2015. Like the original 1 oz coin, their beautifully detailed design features the iconic helmeted figure of Britannia, carrying a trident and shield adorned with the Union Jack. Britannia, the national personification of Britain, has a long history on our coinage. She made her first appearance on coins way back in AD 119, during the reign of the Roman Emperor Hadrian. Hadrian, of course, if more famous for the construction of the frontier wall that bears his name.
Although fractional gold Britannia coins haven’t been around long, The Royal Mint has been creating coins for kings, queens and governments for over 1,000 years. So, apart from being valuable and beautiful, these coins also have a historic value. Highly respected and trusted, the Mint produces gold coins of unrivaled quality. Britannias are 99.9% pure gold, and have sophisticated security design features to prevent counterfeiting. These include:
- A latent image or hologram, which changes from a padlock to Britannia’s famous trident when the coin is tilted.
- Hi-tech Picosecond lasers – which can make indents 200 times narrower than the width of a human hair – have been used to create surface animation, which brings the background waves to life.
- Micro text gives both decoration and protection – ‘an ornament and a safeguard’.
- Britannia’s shield bears the Union Flag accented with tincture lines.
Regardless of their size, all Britannias are made of 24 carat gold, making them one of the purest gold coins available. Weight, purity and gold content are all backed by the Royal Mint. The 1 oz coin measures 32.69mm in diameter, while the diameter of the fractional coins is 27mm, 22 mm and 16.5mm for the 1/2 oz, 1/4 oz and 1/10 oz respectively.
Click here to read more about the 1 oz gold Britannia.
Where to buy fractional coins
Since it costs virtually the same to produce the lower priced fractional coins as the full 1 oz bullion coins, you are much less likely to come across fake fractional coins. But why take a chance? Always buy your coins from from an LBMA (London Bullion Market) approved dealer, or directly from the Royal Mint.