Why IAU Is More Favorable: Fees 0.25% vs 0.40%
SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are ETFs backed by physical gold holdings. IAU’s expense ratio is 0.25%, while GLD’s is 0.40%. Returns over their lifetimes are IAU 904% versus GLD 880%, giving IAU a cost advantage.
SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are gold ETFs that hold physical gold. Both products are designed to track the price of physical gold. Investors mainly choose these two ETFs when they want exposure to gold.
IAU’s annual expense ratio is 0.25%. GLD’s annual expense ratio is 0.40%. The article explains that this fee difference affects long-term performance.
IAU’s cumulative return over its lifetime is 904%. GLD’s cumulative return over the same period is 880%. The article reports that the two ETFs have performed similarly overall, but that the fee difference has contributed to a gap in long-term returns.
Both ETFs maintain a structure in which they hold physical gold. Their holding and tracking methods are governed by each ETF’s operating documents. Differences in management approach may be a factor in investors’ choices.
The article’s summary is that costs are a key factor determining long-term investment performance. It concludes that IAU, with its lower fees, offers the same exposure to gold with greater cost efficiency. Investors should check the total costs before choosing a product.
Sources: The Motley Fool
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