GLD vs. EMB: What’s The Difference?

The SPDR Gold Shares (GLD) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between GLD and EMB? And which fund is better?

The expense ratio of GLD is 0.01 percentage points higher than EMB’s (0.4% vs. 0.39%). GLD also has a high exposure to the technology sector while EMB is mostly comprised of BBB bonds. Overall, GLD has provided lower returns than EMB over the past ten years.

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

Summary

GLD EMB
Name SPDR Gold Shares iShares J.P. Morgan USD Emerging Markets Bond ETF
Category N/A Emerging Markets Bond
Issuer SPDR State Street Global Advisors iShares
AUM 59.26B 19.76B
Avg. Return 5.81% 6.43%
Div. Yield 0.0% 3.85%
Expense Ratio 0.4% 0.39%

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 J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.

GLD’s dividend yield is 3.85% lower than that of EMB (0.0% vs. 3.85%). Also, GLD yielded on average 0.63% less per year over the past decade (5.81% vs. 6.43%). The expense ratio of GLD is 0.01 percentage points higher than EMB’s (0.4% vs. 0.39%).

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Fund Composition

Holdings

GLD - Holdings

GLD Holdings Weight
Gold Trust 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

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%.

EMB - Holdings

EMB Bond Sectors Weight
BBB 33.79%
B 21.97%
BB 16.92%
A 13.67%
AA 7.97%
Below B 4.49%
Others 1.11%
AAA 0.09%
US Government 0.0%

EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.

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Risk Analysis

GLD EMB
Mean Return 0.21 0.44
R-squared 16.21 23.34
Std. Deviation 16.58 8.44
Alpha 3.91 0.89
Beta 0.48 1.36
Sharpe Ratio 0.12 0.55
Treynor Ratio 1.21 3.24

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

The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a Mean Return of 0.44 with a Sharpe Ratio of 0.55 and a Beta of 1.36. Its Treynor Ratio is 3.24 while EMB’s Alpha is 0.89. Furthermore, the fund has a R-squared of 23.34 and a Standard Deviation of 8.44.

GLD’s Mean Return is 0.23 points lower than that of EMB and its R-squared is 7.13 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than EMB. The Alpha and Beta of GLD are 3.02 points higher and 0.88 points lower than EMB’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. EMB - Annual Returns

Year GLD EMB
2020 23.68% 5.48%
2019 18.36% 15.57%
2018 -1.54% -5.67%
2017 11.41% 9.98%
2016 8.69% 9.41%
2015 -11.78% 0.43%
2014 -0.58% 6.69%
2013 -28.09% -7.42%
2012 5.26% 17.64%
2011 11.2% 7.2%
2010 27.25% 11.47%

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 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.

Portfolio Growth

GLD vs. EMB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $16,395 5.81%
EMB $10,000 $19,295 6.43%

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 EMB, the end total would have been $19,295. This equates to a $9,295 profit over 11 years and a compound annual growth rate (CAGR) of 6.43%.

GLD’s CAGR is 0.63 percentage points lower than that of EMB and as a result, would have yielded $2,900 less on a $10,000 investment. Thus, GLD performed worse than EMB by 0.63% annually.


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