The SPDR Gold Shares (GLD) and the iShares MSCI Emerging Markets ETF (EEM) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and EEM is a iShares Diversified Emerging Mkts fund. So, what’s the difference between GLD and EEM? And which fund is better?
The expense ratio of GLD is 0.28 percentage points lower than EEM’s (0.4% vs. 0.68%). GLD also has a lower exposure to the technology sector and a lower standard deviation. Overall, GLD has provided higher returns than EEM over the past ten years.
In this article, we’ll compare GLD vs. EEM. We’ll look at performance and risk metrics, as well as at their industry exposure and holdings. Moreover, I’ll also discuss GLD’s and EEM’s fund composition, portfolio growth, and annual returns and examine how these affect their overall returns.
|Name||SPDR Gold Shares||iShares MSCI Emerging Markets ETF|
|Category||N/A||Diversified Emerging Mkts|
|Issuer||SPDR State Street Global Advisors||iShares|
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 iShares MSCI Emerging Markets ETF (EEM) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 30.33B total assets under management and has yielded an average annual return of 5.47% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.68%.
GLD’s dividend yield is 1.48% lower than that of EEM (0.0% vs. 1.48%). Also, GLD yielded on average 0.33% more per year over the past decade (5.81% vs. 5.47%). The expense ratio of GLD is 0.28 percentage points lower than EEM’s (0.4% vs. 0.68%).
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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 iShares MSCI Emerging Markets ETF (EEM) has the most exposure to the Technology sector at 21.36%. This is followed by Financial Services and Consumer Cyclical at 18.39% and 15.16% respectively. Utilities (1.99%), Industrials (4.61%), and Healthcare (5.06%) only make up 11.66% of the fund’s total assets.
EEM’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.17%, 5.45%, 9.07%, 11.76%, and 15.16%.
GLD is 21.36% less exposed to the Technology sector than EEM (0.0% vs 21.36%). GLD’s exposure to Industrials and Energy stocks is 4.61% lower and 5.17% lower respectively (0.0% vs. 4.61% and 0.0% vs. 5.17%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 35.53% less of the fund’s holdings compared to EEM (0.00% vs. 35.53%).
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%.
|Taiwan Semiconductor Manufacturing Co Ltd||6.36%|
|Alibaba Group Holding Ltd Ordinary Shares||4.58%|
|Tencent Holdings Ltd||4.41%|
|Samsung Electronics Co Ltd||4.05%|
|Naspers Ltd Class N||1.04%|
|Reliance Industries Ltd Shs Dematerialised||0.97%|
|China Construction Bank Corp Class H||0.83%|
EEM’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Alibaba Group Holding Ltd Ordinary Shares, Tencent Holdings Ltd, Samsung Electronics Co Ltd, and Meituan at 6.36%, 4.58%, 4.41%, 4.05%, and 1.24%.
Vale SA (1.04%), Naspers Ltd Class N (1.04%), and Reliance Industries Ltd Shs Dematerialised (0.97%) have a slightly smaller but still significant weight. Infosys Ltd and China Construction Bank Corp Class H are also represented in the EEM’s holdings at 0.92% and 0.83%.
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The SPDR Gold Shares (GLD) has a R-squared of 16.21 with a Standard Deviation of 16.58 and a Alpha of 3.91. Its Treynor Ratio is 1.21 while GLD’s Beta is 0.48. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Mean Return of 0.21.
The iShares MSCI Emerging Markets ETF (EEM) has a Treynor Ratio of 2.22 with a R-squared of 83.5 and a Standard Deviation of 17.79. Its Mean Return is 0.38 while EEM’s Beta is 1.08. Furthermore, the fund has a Sharpe Ratio of 0.22 and a Alpha of -2.33.
GLD’s Mean Return is 0.17 points lower than that of EEM and its R-squared is 67.29 points lower. With a Standard Deviation of 16.58, GLD is slightly less volatile than EEM. The Alpha and Beta of GLD are 6.24 points higher and 0.60 points lower than EEM’s Alpha and Beta.
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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 2017 was the strongest year for EEM, returning 36.42% on an annual basis. The poorest year for EEM in the last ten years was 2011, with a yield of -18.87%. Most years the iShares MSCI Emerging Markets ETF has given investors modest returns, such as in 2014, 2016, and 2010, when gains were -2.82%, 10.51%, and 15.93% 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 EEM, the end total would have been $15,578. This equates to a $5,578 profit over 11 years and a compound annual growth rate (CAGR) of 5.47%.
GLD’s CAGR is 0.33 percentage points higher than that of EEM and as a result, would have yielded $817 more on a $10,000 investment. Thus, GLD outperformed EEM by 0.33% annually.
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