The SPDR Gold Shares (GLD) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between GLD and DFAC? And which fund is better?
The expense ratio of GLD is 0.21 percentage points higher than DFAC’s (0.4% vs. 0.19%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than DFAC over the past ten years.
In this article, we’ll compare GLD vs. DFAC. We’ll look at industry exposure and holdings, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss GLD’s and DFAC’s fund composition, portfolio growth, and performance and examine how these affect their overall returns.
|Name||SPDR Gold Shares||Dimensional U.S. Core Equity 2 ETF|
|Issuer||SPDR State Street Global Advisors||Dimensional Fund Advisors|
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%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
GLD’s dividend yield is 1.00% lower than that of DFAC (0.0% vs. 1.0%). Also, GLD yielded on average 8.13% less per year over the past decade (5.81% vs. 13.93%). The expense ratio of GLD is 0.21 percentage points higher than DFAC’s (0.4% vs. 0.19%).
The SPDR Gold Shares (GLD) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
GLD’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
GLD is 22.81% less exposed to the Technology sector than DFAC (0.0% vs 22.81%). GLD’s exposure to Industrials and Energy stocks is 14.13% lower and 2.67% lower respectively (0.0% vs. 14.13% and 0.0% vs. 2.67%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 29.63% less of the fund’s holdings compared to DFAC (0.00% vs. 29.63%).
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%.
|Johnson & Johnson||1.05%|
|Facebook Inc Class A||1.05%|
|JPMorgan Chase & Co||1.0%|
|Alphabet Inc Class C||0.85%|
|Alphabet Inc Class A||0.84%|
|Berkshire Hathaway Inc Class B||0.75%|
|Visa Inc Class A||0.74%|
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
The SPDR Gold Shares (GLD) has a Mean Return of 0.21 with a R-squared of 16.21 and a Treynor Ratio of 1.21. Its Alpha is 3.91 while GLD’s Standard Deviation is 16.58. Furthermore, the fund has a Beta of 0.48 and a Sharpe Ratio of 0.12.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Mean Return of 1.19 with a Standard Deviation of 15.55 and a Sharpe Ratio of 0.88. Its R-squared is 95.1 while DFAC’s Beta is 1.12. Furthermore, the fund has a Alpha of -2.75 and a Treynor Ratio of 11.85.
GLD’s Mean Return is 0.98 points lower than that of DFAC and its R-squared is 78.89 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than DFAC. The Alpha and Beta of GLD are 6.66 points higher and 0.64 points lower than DFAC’s Alpha and Beta.
GLD had its best year in 2010 with an annual return of 27.25%. GLD’s worst year over the past decade yielded -28.09% and occurred in 2013. In most years the SPDR Gold Shares provided moderate returns such as in 2012, 2016, and 2011 where annual returns amounted to 5.26%, 8.69%, and 11.2% respectively.
The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in GLD would have resulted in a final balance of $16,395. This is a profit of $6,395 over 11 years and amounts to a compound annual growth rate (CAGR) of 5.81%.
With a $10,000 investment in DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.
GLD’s CAGR is 8.13 percentage points lower than that of DFAC and as a result, would have yielded $22,401 less on a $10,000 investment. Thus, GLD performed worse than DFAC by 8.13% annually.
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