Key Points
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The SPDR Gold Trust is the world’s largest gold ETF.
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But its high fees make it less attractive than the smaller gold ETFs.
The price of gold hit an all-time high of about $5,600 per ounce this January. It’s pulled back to about $4,680 as of this writing, but it’s still up 40% over the past 12 months. That rally was driven by the Fed’s six interest rate cuts in 2024 and 2025, which weakened the U.S. dollar and boosted gold’s value; as well as investors flocking to gold as a safe-haven asset amid escalating geopolitical conflicts, trade wars, tariffs, elevated inflation, and other macro headwinds.
One of the easiest ways to profit from that trend without buying physical gold bars is to invest in an exchange-traded fund (ETF) that tracks the price of gold. The most popular gold ETF is the SPDR Gold Trust (NYSEMKT: GLD), which was launched in 2004. With $157.5 billion in assets, it’s also the world’s largest gold ETF by a wide margin — but is it still the best one for investors?
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A magnifying glass on a gold price chart.
Image source: Getty Images.
GLD’s biggest strengths and weaknesses
The SPDR Gold Trust holds physical gold bars at its vaults in London. Each share of the ETF represents a fractional ownership of that gold. It allows a handful of institutional investors to redeem their shares for physical gold, but most of its other investors don’t have that privilege.
Many active traders and institutional investors prefer GLD over other gold ETFs because it has the most liquidity, the tightest bid-ask spreads, and the deepest options market. Since institutions widely hold it, it’s easy to quickly trade large positions.
But GLD isn’t the best option for retail investors looking for a gold ETF to buy, hold, and forget, as its gross expense ratio of 0.40% is much higher than that of comparable ETFs. Those fees reduce the ETF’s returns over time, causing it to underperform the spot price of gold. Over the past five years, GLD has rallied 152%, but gold’s price has risen 163%.
Some cheaper gold ETFs include the iShares Gold Trust (NYSEMKT: IAU) and GraniteShares Gold Trust (NYSEMKT: BAR), which charge sponsor fees of 0.25% and 0.17%, respectively. IAU manages $72.6 billion in assets, making it the second-largest gold ETF after GLD. BAR is a smaller ETF with $1.6 billion in assets. Both of these ETFs have risen about 154% over the past five years and outperformed GLD, and that gap will widen over the long term. Simply put, GLD is a simple way to invest in gold — but anyone who isn’t an active trader or institutional investor should stick with IAU, BAR, or other ETFs that charge much lower fees.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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