GLD vs. IAU: Which Gold ETF Costs You Less Over Time?

Quick Read

• IAU’s 0.25% expense ratio versus GLD’s 0.40% compounded into a 5-point return gap over the past decade on otherwise identical gold exposure.

• GLDM’s 0.10% expense ratio undercuts both IAU and GLD, making it the strongest choice for buy-and-hold investors focused purely on low costs.

• GLD justifies its higher fee only for traders who need deep options markets or institutional-level execution where fill quality outweighs cost.

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SPDR Gold Shares (NYSEARCA:GLD) and iShares Gold Trust (NYSEARCA:IAU) hold physical bullion in vaults and track the LBMA spot price minus expenses. Both of these ETFs have delivered nearly identical returns over the last decade. Yet the choice between them hinges on whether you are trading or holding, because the expense gap, share-price design, and options liquidity quietly push different investors toward different answers.

What each fund is actually betting on

GLD was built in 2004 as the institutional-grade vehicle for gold exposure, with State Street pricing it at 0.40% and keeping it there, betting on scale and liquidity over fee leadership. IAU, launched by iShares the next year, took the opposite position. Its 0.25% expense ratio assumes long-term holders will eventually notice the drag and migrate, and most importantly, they have. IAU now holds roughly $67.19 billion in net assets and continues to gain ground on GLD, driven by retail and advisory flows.

GLD wins when you need to move size quickly or trade options. IAU wins when you plan to hold the position.

Where the cost gap shows up

Over the past decade, GLD returned 224% while IAU returned 229%, and this gap of roughly four and a half percentage points is almost entirely the compounded expense differential. On a $100,000 position held for 20 years, growing about 6% a year, the 0.15% annual fee delta compounds to roughly $8,000 of foregone return. The numbers accrue every year without providing additional value.

Year-to-date, GLD is down 1.4%, and IAU is down 1.36%, with both correcting roughly 9.9% over the past month as gold pulled back from spring highs.

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The practical comparison

The share-price difference matters for small accounts, and an investor adding $200 a month can buy two and a half shares of IAU without leftover cash, but cannot buy a single share of GLD. GLD has one of the deepest options books of any commodity ETF, while IAU’s chain is functional but noticeably thinner.

Both funds are grantor trusts, taxed at up to 28% on collectibles, above the standard 20% long-term capital gains rate. That treatment is identical across GLD, IAU, and GLDM, so it does not tilt the choice between them. It does argue for holding any of them in a tax-advantaged account when possible.

What about GLDM

SPDR Gold MiniShares (NYSEARCA:GLDM) undercuts both at 0.10%. For buy-and-hold, GLDM is cheaper than IAU by 15 basis points and cheaper than GLD by 30. It lacks the options depth of GLD and the brand familiarity of IAU, but for a retirement account, the fee math is compelling.

The verdict

IAU is the better fit for most investors choosing between the two. Its expense ratio is meaningfully lower, its share price is well-suited to smaller accounts, and its tax treatment is identical. GLD only earns its keep for traders who need razor‑thin spreads, deep options markets, or institutional‑level execution where fees matter less than fill quality. For a multi‑year hold, IAU comes out ahead, and GLDM deserves a look before either, for anyone considering low‑cost bullion exposure or long‑term commodity allocation.

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