The iShares Core U.S. Aggregate Bond ETF (AGG) and the SPDR Gold Shares (GLD) are both among the Top 100 ETFs. AGG is a iShares Intermediate-Term Bond fund and GLD is a SPDR State Street Global Advisors N/A fund. So, what’s the difference between AGG and GLD? And which fund is better?

The expense ratio of AGG is 0.36 percentage points lower than GLD’s (0.04% vs. 0.4%). AGG is mostly comprised of AAA bonds while GLD has a high exposure to the technology sector. Overall, AGG has provided lower returns than GLD over the past ten years.

In this article, we’ll compare AGG vs. GLD. We’ll look at annual returns and portfolio growth, as well as at their performance and holdings. Moreover, I’ll also discuss AGG’s and GLD’s fund composition, industry exposure, and risk metrics and examine how these affect their overall returns.

Summary

AGGGLD
NameiShares Core U.S. Aggregate Bond ETFSPDR Gold Shares
CategoryIntermediate-Term BondN/A
IssueriSharesSPDR State Street Global Advisors
AUM88.8B59.26B
Avg. Return4.04%5.81%
Div. Yield1.95%0.0%
Expense Ratio0.04%0.4%

The iShares Core U.S. Aggregate Bond ETF (AGG) is a Intermediate-Term Bond fund that is issued by iShares. It currently has 88.8B total assets under management and has yielded an average annual return of 4.04% over the past 10 years. The fund has a dividend yield of 1.95% with an expense ratio of 0.04%.

The SPDR Gold Shares (GLD) is a N/A fund that is issued by SPDR State Street Global Advisors. It currently has 59.26B total assets under management and has yielded an average annual return of 5.81% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.4%.

AGG’s dividend yield is 1.95% higher than that of GLD (1.95% vs. 0.0%). Also, AGG yielded on average 1.77% less per year over the past decade (4.04% vs. 5.81%). The expense ratio of AGG is 0.36 percentage points lower than GLD’s (0.04% vs. 0.4%).

Fund Composition

Holdings

AGG - Holdings

AGG Bond SectorsWeight
AAA68.92%
BBB15.38%
A11.16%
AA2.92%
Others1.63%
Below B0.0%
B0.0%
BB0.0%
US Government0.0%

AGG’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 68.92%, 15.38%, 11.16%, 2.92%, and 1.63%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

GLD - Holdings

GLD HoldingsWeight
Gold Trust100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

GLD’s Top Holdings are Gold Trust, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the GLD’s holdings at 0% and 0%.

Risk Analysis

AGGGLD
Mean Return0.280.21
R-squared99.9616.21
Std. Deviation3.0316.58
Alpha-0.083.91
Beta1.010.48
Sharpe Ratio0.90.12
Treynor Ratio2.71.21

The iShares Core U.S. Aggregate Bond ETF (AGG) has a Alpha of -0.08 with a Mean Return of 0.28 and a Sharpe Ratio of 0.9. Its Standard Deviation is 3.03 while AGG’s Treynor Ratio is 2.7. Furthermore, the fund has a Beta of 1.01 and a R-squared of 99.96.

The SPDR Gold Shares (GLD) has a Treynor Ratio of 1.21 with a Mean Return of 0.21 and a Sharpe Ratio of 0.12. Its Standard Deviation is 16.58 while GLD’s R-squared is 16.21. Furthermore, the fund has a Alpha of 3.91 and a Beta of 0.48.

AGG’s Mean Return is 0.07 points higher than that of GLD and its R-squared is 83.75 points higher. With a Standard Deviation of 3.03, AGG is slightly less volatile than GLD. The Alpha and Beta of AGG are 3.99 points lower and 0.53 points higher than GLD’s Alpha and Beta.

Performance

Annual Returns

AGG vs. GLD - Annual Returns

YearAGGGLD
20207.42%23.68%
20198.68%18.36%
2018-0.05%-1.54%
20173.53%11.41%
20162.56%8.69%
20150.48%-11.78%
20146.04%-0.58%
2013-2.15%-28.09%
20124.04%5.26%
20117.58%11.2%
20106.3%27.25%

AGG had its best year in 2019 with an annual return of 8.68%. AGG’s worst year over the past decade yielded -2.15% and occurred in 2013. In most years the iShares Core U.S. Aggregate Bond ETF provided moderate returns such as in 2017, 2012, and 2014 where annual returns amounted to 3.53%, 4.04%, and 6.04% respectively.

The year 2010 was the strongest year for GLD, returning 27.25% on an annual basis. The poorest year for GLD in the last ten years was 2013, with a yield of -28.09%. Most years the SPDR Gold Shares has given investors modest returns, such as in 2012, 2016, and 2011, when gains were 5.26%, 8.69%, and 11.2% respectively.

Portfolio Growth

AGG vs. GLD - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
AGG$10,000$15,3684.04%
GLD$10,000$16,3955.81%

A $10,000 investment in AGG would have resulted in a final balance of $15,368. This is a profit of $5,368 over 11 years and amounts to a compound annual growth rate (CAGR) of 4.04%.

With a $10,000 investment in GLD, the end total would have been $16,395. This equates to a $6,395 profit over 11 years and a compound annual growth rate (CAGR) of 5.81%.

AGG’s CAGR is 1.77 percentage points lower than that of GLD and as a result, would have yielded $1,027 less on a $10,000 investment. Thus, AGG performed worse than GLD by 1.77% annually.

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