Key Points
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GLDM offers a lower expense ratio than IAU, which could appeal to cost-conscious gold investors
-
Both funds delivered similar one-year returns, but GLDM experienced a much smaller maximum drawdown than IAU over the past five years.
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Each fund is structured to reflect gold prices, with no quirks noted in either fund’s design.
SPDR Gold MiniShares Trust (NYSEMKT:GLDM) features significantly lower expenses and a shallower historical drawdown than iShares Gold Trust (NYSEMKT:IAU), while both track the price of gold with similar recent returns.
Both IAU and GLDM are designed to give investors exposure to the price of gold bullion, providing a way to participate in gold’s performance without physical storage hassles. This comparison looks at their costs, historical performance, risk, and structure to help clarify where each fund fits in a gold allocation.
Snapshot (Cost & Size)
|
Metric |
IAU |
GLDM |
|---|---|---|
|
Issuer |
IShares |
SPDR |
|
Expense ratio |
0.25% |
0.10% |
|
1-yr return (as of 2026-01-09) |
67.2% |
66.2% |
|
Beta |
0.09 |
0.09 |
|
AUM |
$72.9 billion |
$28.0 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
GLDM stands out as the more affordable option on expenses, with a 0.10% annual fee compared to IAU’s 0.25%. Yield is not a consideration for these funds, as neither pays a dividend.
Performance & Risk Comparison
|
Metric |
IAU |
GLDM |
|---|---|---|
|
Max drawdown (5 y) |
-20.92% |
-20.92% |
|
Growth of $1,000 over 5 years |
$2,414 |
$2,427 |
What’s Inside
GLDM is a pure gold exposure vehicle, with 100% of its portfolio aligned to real estate—here reflecting gold holdings rather than traditional property assets. The fund has been around for 7.5 years, offering direct access to gold prices with no sector or issuer quirks, and does not hold equities or alternative assets. The specific holdings and sector blurb mirror IAU, with both funds designed to track gold’s spot price as closely as possible.
IAU follows the same approach, offering investors exposure to the price movements of gold bullion. There is no sector tilt or equity exposure, and the holdings structure is nearly identical to GLDM, making both funds straightforward options for tracking gold’s performance without additional complexity.
For more guidance on ETF investing, check out the full guide at this link.
What This Means For Investors
For most investors, it makes sense to own some gold. That’s because gold is a longstanding hedge against inflation — the process by which prices rise, and money itself loses purchasing power. Moreover, ETFs are a great way to develop gold exposure, as they generate returns that duplicate the price appreciation of physical gold bullion without any of the storage and safety concerns of owning large amounts of physical gold.
Turning to the ETFs themselves, both IAU and GLDM provide direct gold exposure with minimal differences in recent returns, but GLDM’s lower expense ratio and smaller historical drawdown may appeal to cost-conscious or risk-averse investors. On the other hand, IAU has over $79 billion in AUM, while GLDM has only $27 billion. While both figures denote ample liquidity that would allow for investors to trade in and out of shares with ease, some people may be drawn to IAU’s larger AUM.
In summary, IAU and GLDM both offer easy access to gold for investors seeking gold exposure. Most investors would be wise to favor GLDM, given its lower expense ratio, which will save them money over the long term.
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Jake Lerch has positions in World Gold Trust – SPDR Gold MiniShares Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.