Three Gold ETFs Compared: Which Delivers the Best Value for Your Portfolio?

Gold has emerged as a cornerstone defensive asset in 2024, climbing 12.7% year-to-date amid macroeconomic uncertainty. Over the past five years, the precious metal has delivered over 73% in returns since the COVID-19 pandemic began. For investors seeking portfolio diversification and inflation protection, physical gold exposure is increasingly essential—but buying and storing bullion directly presents logistical challenges.

The solution? Gold ETFs offer a practical alternative, combining liquidity, transparent pricing, lower costs, and ease of trading compared to physical holdings. Among the numerous options available, three stand out: GLD (SPDR Gold Shares), IAU (iShares Gold Trust), and GLDM (SPDR Gold MiniShares Trust). Each tracks the same underlying asset—physical gold—yet differ meaningfully in structure, expenses, and accessibility.

Performance Snapshot: The Numbers Tell the Story

All three ETFs track identical gold prices, so returns naturally cluster together. Year-to-date performance ranges from 12.35% to 12.71%, with one-year returns between 19.55% and 19.87%. The modest variance stems entirely from differences in management fees. Yet these fee variations compound significantly over extended holding periods.

GLD: The Market Heavyweight

As the world’s largest gold-backed ETF, GLD dominates with $61.31 billion in assets under management. Launched in November 2004, it holds approximately 26.5 million ounces of physical gold. The substantial AUM translates to strong liquidity and institutional credibility—but also a higher per-unit price.

The trade-off? GLD carries the steepest expense ratio at 0.40%. Despite this, it posted the strongest returns: 12.71% year-to-date and 19.87% over twelve months. However, recent fund flows reveal cracks in the armor—the ETF experienced $513 million in net outflows over the past three months, suggesting investor migration toward cheaper alternatives.

GLDM: The Cost-Conscious Choice

Launched in June 2018, GLDM revolutionized gold ETF investing with the industry’s lowest fee structure at just 0.10%. With $7.38 billion in AUM and approximately 3.2 million ounces of gold, it targets price-sensitive, long-term investors. The lower asset base means lower per-share NAV, reducing entry barriers for retail investors building sustainable gold positions.

Performance-wise, GLDM ranks second: 12.39% year-to-date and 19.68% annually. Notably, it captured $110 million in net inflows during the past three months—a clear signal of investor preference for its fee advantage. For buy-and-hold strategies spanning years or decades, the 0.30% annual fee savings versus GLD compounds into meaningful wealth preservation.

IAU: The Balanced Middle Ground

iShares Gold Trust occupies the midpoint across all metrics. Its $28.40 billion AUM sits between GLD and GLDM, while its 0.25% expense ratio splits the difference. Launched in January 2005, IAU holds roughly 12.2 million ounces of gold and delivered 12.35% year-to-date returns with 19.55% annual performance.

Like GLD, IAU faced headwinds recently, with $617 million in net outflows over three months. This suggests the combined appeal of GLDM’s lower costs and GLD’s proven scale may be siphoning flows from the middle-tier option.

Which Gold ETF Wins?

The answer depends on your investment profile:

For maximum returns and institutional-grade liquidity: GLD remains the best gold ETF despite its higher fees, backed by unmatched assets and consistent top-tier performance.

For cost optimization and long-term wealth accumulation: GLDM emerges as the superior choice. Over a 20-year holding period, the 0.30% annual fee savings (versus GLD) can preserve an extra 6% of capital—a meaningful difference when compounded.

For balanced exposure: IAU serves investors comfortable with mid-range fees and solid performance, though recent outflows suggest the product faces competitive pressure.

Ultimately, all three track identical gold prices, so the decision hinges on fee sensitivity, investment horizon, and liquidity preferences. For first-time gold ETF investors, starting with GLDM’s low-cost structure while accessing gold’s defensive properties represents the pragmatic entry point.