GLD vs. GOVT: What’s The Difference?

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

The expense ratio of GLD is 0.35 percentage points higher than GOVT’s (0.4% vs. 0.05%). GLD also has a high exposure to the technology sector while GOVT is mostly comprised of AAA bonds. Overall, GLD has provided higher returns than GOVT over the past ten years.

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

Summary

GLD GOVT
Name SPDR Gold Shares iShares U.S. Treasury Bond ETF
Category N/A Intermediate Government
Issuer SPDR State Street Global Advisors iShares
AUM 59.26B 17.07B
Avg. Return 5.81% 2.67%
Div. Yield 0.0% 1.0%
Expense Ratio 0.4% 0.05%

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 U.S. Treasury Bond ETF (GOVT) is a Intermediate Government fund that is issued by iShares. It currently has 17.07B total assets under management and has yielded an average annual return of 2.67% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.05%.

GLD’s dividend yield is 1.00% lower than that of GOVT (0.0% vs. 1.0%). Also, GLD yielded on average 3.13% more per year over the past decade (5.81% vs. 2.67%). The expense ratio of GLD is 0.35 percentage points higher than GOVT’s (0.4% vs. 0.05%).

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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%.

GOVT - Holdings

GOVT Bond Sectors Weight
AAA 100.0%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

GOVT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.

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Risk Analysis

GLD GOVT
Mean Return 0.21 0
R-squared 16.21 0
Std. Deviation 16.58 0
Alpha 3.91 0
Beta 0.48 0
Sharpe Ratio 0.12 0
Treynor Ratio 1.21 0

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

The iShares U.S. Treasury Bond ETF (GOVT) has a Beta of 0 with a Alpha of 0 and a Mean Return of 0. Its Treynor Ratio is 0 while GOVT’s R-squared is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Standard Deviation of 0.

GLD’s Mean Return is 0.21 points higher than that of GOVT and its R-squared is 16.21 points higher. With a Standard Deviation of 16.58, GLD is slightly more volatile than GOVT. The Alpha and Beta of GLD are 3.91 points higher and 0.48 points higher than GOVT’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. GOVT - Annual Returns

Year GLD GOVT
2020 23.68% 7.92%
2019 18.36% 6.71%
2018 -1.54% 0.74%
2017 11.41% 2.19%
2016 8.69% 0.92%
2015 -11.78% 0.76%
2014 -0.58% 4.99%
2013 -28.09% -2.84%
2012 5.26% 0.0%
2011 11.2% 0.0%
2010 27.25% 0.0%

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 2020 was the strongest year for GOVT, returning 7.92% on an annual basis. The poorest year for GOVT in the last ten years was 2013, with a yield of -2.84%. Most years the iShares U.S. Treasury Bond ETF has given investors modest returns, such as in 2018, 2015, and 2016, when gains were 0.74%, 0.76%, and 0.92% respectively.

Portfolio Growth

GLD vs. GOVT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $11,007 5.81%
GOVT $10,000 $12,297 2.67%

A $10,000 investment in GLD would have resulted in a final balance of $11,007. This is a profit of $1,007 over 8 years and amounts to a compound annual growth rate (CAGR) of 5.81%.

With a $10,000 investment in GOVT, the end total would have been $12,297. This equates to a $2,297 profit over 8 years and a compound annual growth rate (CAGR) of 2.67%.

GLD’s CAGR is 3.13 percentage points higher than that of GOVT and as a result, would have yielded $1,290 less on a $10,000 investment. Thus, GLD outperformed GOVT by 3.13% annually.


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