iShares Gold Trust vs SPDR Gold Trust: The 0.15% Fee Gap That Matters More Than You Think

"Both trusts exist for one purpose: own physical gold and track the spot price. IAU's prospectus describes the trust as seeking to reflect the performance of the price of gold, before expenses and liabilities, and GLD's mandate is functionally identical. IAU's holdings are reported as 100.02% gold bullion, with the small overshoot reflecting cash and accruals. GLD is structured the same way."

"The meaningful gap is cost. GLD carries a 0.40% expense ratio, while IAU charges 0.25%. On a multi-year hold, that fee differential compounds against returns, which is the single biggest reason long-term allocators tilt toward IAU."

"Performance over the past year shows IAU edging GLD by a sliver. IAU returned 39.07% over the trailing 12 months, while GLD posted 38.92%. That spread is roughly the fee gap, which is exactly what theory predicts when both funds hold pure bullion. Stretch the lens to ten years and the divergence widens: IAU is up 263.43% versus GLD's 257.81%. Compounding fees matter."

Both GLD and IAU are physically backed gold ETFs designed to track spot gold prices, holding essentially 100% gold bullion with minimal cash and accruals. The primary distinction lies in their expense ratios: GLD charges 0.40% annually while IAU charges 0.25%. Over the trailing 12 months, IAU returned 39.07% compared to GLD's 38.92%, with the performance gap reflecting the fee differential. Over a decade, this compounding effect becomes more pronounced, with IAU up 263.43% versus GLD's 257.81%. GLD maintains advantages in liquidity and institutional trading through larger creation units and deeper options markets, appealing to traders and hedgers. IAU attracts retail investors and advisors prioritizing lower costs. Gold remains supportive as real yields have softened and inflation persists above target levels.

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