GLD, IAU or GLDM: Which is the best spot gold ETF?

The price of gold (CM:XAUUSD) has increased by 12.7% so far in 2024. It has gained popularity as an investment option due to persistent macroeconomic turbulence. Since the onset of the COVID-19 pandemic, the price of gold has skyrocketed more than 73% over the last five years. It is prudent to have some exposure to the precious yellow metal in your portfolio to ensure diversification and as a hedge against inflation. That said, the buy out of physical gold has its challenges. Investors can include gold in their portfolios by investing in gold ETFs. We use Gate's ETF comparison tool for spot gold ETFs to compare SPDR Gold Shares (GLD), iShares Gold Trust (IAU), and SPDR Gold MiniShares Trust (GLDM) and determine the best option.

It is important to note that, since all spot gold ETFs track the prices of the same physical metal, gold, their returns are similar, as seen in the chart below. The small variations in the returns of gold ETFs are due to differences in their management fees. Investing in gold ETFs has several benefits, including liquidity, ease of trading, transparency in gold prices, and convenience and security. Additionally, it is cheaper to invest in gold ETFs than to buy out/sell and store gold bars.

The Gate ETF comparison tool allows users to compare ETFs based on various parameters, including AUM ( assets under management ), fund flow, expense ratio, technicals, and performance over different time periods.

SPDR Gold Shares (GLD)

The SPDR Gold Shares ETF is the largest physically backed gold ETF in the world, with an AUM of 61.310 billion USD. The highest AUM also implies a higher price per unit of the fund, making the buy out of GLD units a bit more expensive. The fund was launched in November 2004 to track the price of gold by following the LBMA Gold Price PM index.

As of June 18, GLD held 26,534,572.50 ounces of gold in the trust. It is important to note that GLD has the highest expense ratio of 0.40% among the three. Despite the high expense ratio, GLD has achieved the highest price returns both in the year-to-date period (12.71%) and in the last year (19.87%). However, the fund experienced net outflows of 513 million dollars in the last three months.

SPDR Gold MiniShares Trust (GLDM)

The SPDR Gold MiniShares Trust boasts the lowest expense ratio of 0.10% for a gold ETF in the industry. GLDM has an AUM of 7.38 billion USD, significantly lower than the GLD ETF. The lower AUM also translates to a lower NAV, making it easier for investors to have long-term exposure to gold at a relatively cheaper cost of ownership. Launched in June 2018, GLDM also tracks gold prices through the LBMA Gold Price PM index.

As of June 18, GLDM held 3,172,941.60 ounces of gold in the basket. Among the three ETFs, GLDM has the second best performance, with returns of 12.39% year-to-date and 19.68% over one year. In the last three months, GLDM saw net inflows of 110 million USD.

iShares Gold Trust (IAU)

The iShares Gold Trust aims to reflect the price of gold bullion following the LBMA Gold Price PM index. Launched in January 2005, IAU has an AUM of 28.4 billion USD and an expense ratio of 0.25%.

As of June 18, IAU held 12,188,952.03 ounces of physical gold in the trust. The IAU ETF has delivered a return of 12.35% year-to-date and 19.55% over the past year. Like GLD, IAU experienced net outflows of 617 million USD in the last three months.

Final reflections

The SPDR Gold Shares ETF seems to be the best option among the three spot gold ETFs based on slightly higher price returns year-to-date and over the last year, as well as the largest AUM base. GLD appears to be well positioned to benefit from the growing demand for the shiny metal.