Generated August 15, 2026.
Overview
GLD and IAU are both physically backed gold ETFs that track spot gold bullion prices, holding actual gold in allocated vaults. The key distinction is cost: IAU charges 0.25% annually while GLD charges 0.40%, a meaningful gap on a passive commodity exposure where NAV tracks the underlying metal nearly dollar-for-dollar. GLD is roughly twice the size by assets under management.
How they differ
The primary difference is the expense ratio. IAU's 0.25% fee is 15 basis points cheaper than GLD's 0.40% — a 37.5% cost advantage that compounds annually. Over a decade, that spread adds up to real money on a buy-and-hold gold position. Both ETFs hold physical gold and neither pays distributions; both have identical beta of 0.36 against broader equity markets, reflecting gold's weak correlation to stocks. GLD has been around slightly longer (since late 2004 vs. early 2005) and holds $132B in assets versus IAU's $60.5B. The price-per-share difference ($401.48 vs. $82.28) is purely a function of share structure and doesn't affect their economic function.
Who each is best for
GLD: Fits investors who prioritize liquidity and trading volume or who already hold the fund and see no reason to incur transaction costs switching to a lower-cost alternative.
IAU: Fits investors seeking the lowest annual cost drag on a passive gold position, particularly those building a new position or adding to existing commodity exposure over time.
Key risks to know
- Gold price volatility. Both ETFs move in lockstep with spot gold. A sharp decline in the gold price—whether triggered by rising real interest rates, a stronger U.S. dollar, or reduced safe-haven demand—reduces NAV directly. Neither fund buffers this risk.
- Opportunity cost of zero yield. Gold generates no dividend, interest, or cash flow. Holding either ETF is a pure bet on price appreciation. Over long periods, this return profile lags dividend-paying assets, and in sideways or declining gold markets, the opportunity cost of capital can be substantial.
- Currency risk. Gold is priced globally in U.S. dollars. For non-U.S. investors, a weaker dollar can offset gains in the local gold price, and vice versa.
- Fee drag in low-return environments. While the difference between 0.25% and 0.40% seems small, in years when gold returns are modest or flat, fees consume a larger share of total return. This is most acute for IAU's lower fee, but applies to GLD as well.
Bottom line
If you value minimizing cost drag on a passive gold position, IAU's 15 basis point advantage is meaningful over a multi-year hold. If liquidity or existing position dynamics matter more, GLD's larger asset base and established history serve equally well, though at a measurable annual cost. Both carry gold's inherent risks: price volatility, zero yield, and sensitivity to dollar and interest-rate movements. Past performance does not predict future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
