Spot Gold ETF Comparison: GLD vs GLDM vs IAU—Which Offers Better Value?

Gold has emerged as a compelling investment hedge in 2024, with prices climbing 12.7% year-to-date and surging over 73% during the past five years since the COVID-19 pandemic began. To gain gold exposure without the hassles of physical storage and transaction costs, many investors turn to gold ETFs. The question isn’t whether to invest in gold, but which spot gold ETF offers the optimal balance of cost, performance, and liquidity.

Understanding the Three Leading Spot Gold ETFs

The three dominant players in the spot gold ETF space track the same underlying asset—physical gold—through the LBMA Gold Price PM Index. Yet their differences in expense ratios, asset under management (AUM), and net flows create meaningful distinctions for long-term investors.

GLD: The Market Leader with Highest Costs

As the world’s largest physical gold-backed ETF, SPDR Gold Shares commands an AUM of $61.31 billion, reflecting institutional and retail confidence. The fund maintains 26,534,572.50 ounces of gold and has delivered year-to-date returns of 12.71%, outperforming its peers. One-year returns reached 19.87%.

However, GLD’s dominance comes at a price—literally. Its expense ratio stands at 0.40%, the highest among the three competitors. For investors seeking long-term accumulation, this fee differential compounds significantly. Additionally, despite strong price performance, GLD experienced net outflows of $513 million over the past quarter, signaling potential shift in investor preferences.

GLDM: The Cost-Conscious Choice

SPDR Gold MiniShares Trust presents a compelling case for cost-sensitive investors. Its expense ratio of 0.10% is the lowest in the industry, offering a 300 basis point advantage over GLD. With an AUM of $7.38 billion and 3,172,941.60 ounces held in trust, GLDM also boasts a lower net asset value per share, reducing the entry barrier for retail investors.

Performance-wise, GLDM delivered year-to-date returns of 12.39% and one-year returns of 19.68%—nearly matching GLD despite its lower fees. The fund attracted net inflows of $110 million in recent months, indicating growing investor interest in its value proposition.

IAU: The Middle Ground

iShares Gold Trust, launched in January 2005, represents a middle-ground option with an AUM of $28.40 billion and an expense ratio of 0.25%. Holding 12,188,952.03 ounces of physical gold, IAU delivered year-to-date and one-year returns of 12.35% and 19.55%, respectively.

Yet IAU mirrors GLD’s recent capital flow challenges, experiencing $617 million in net outflows over the past three months—the largest outflow figure among the trio.

The Real Cost of Ownership Over Time

While all three ETFs track identical gold prices, their fee structures produce measurable wealth consequences. A $10,000 investment over 20 years could see expense ratio differences reduce returns by hundreds or thousands of dollars. GLDM’s 0.10% fee structure substantially narrows this gap compared to GLD’s 0.40%.

Liquidity and Accessibility Factors

GLD’s massive AUM ensures superior liquidity and tighter bid-ask spreads, benefiting active traders. GLDM’s lower per-share cost democratizes gold access, appealing to accumulation-focused investors with smaller position sizes. IAU occupies the middle tier on both metrics.

The recent net inflow trajectory of $110 million into GLDM—contrasted with significant outflows from both GLD and IAU—suggests market recognition of GLDM’s efficiency advantage.

The Verdict

While GLD remains the default choice for large institutional positions requiring maximum liquidity, GLDM emerges as the more economically rational selection for typical retail investors pursuing buy-and-hold gold exposure. Its combination of industry-leading cost efficiency, matching performance, positive capital flows, and accessible entry price creates a compelling value proposition. For investors already in GLD or IAU, evaluating a transition to GLDM warrants consideration, particularly if fees represent a meaningful drag on long-term returns.

The best spot gold ETF isn’t necessarily the largest—it’s the one that minimizes drag on your returns while delivering reliable gold price tracking.