The SPDR Gold Shares (GLD) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and HYG is a iShares High Yield Bond fund. So, what’s the difference between GLD and HYG? And which fund is better?
The expense ratio of GLD is 0.08 percentage points lower than HYG’s (0.4% vs. 0.48%). GLD also has a high exposure to the technology sector while HYG is mostly comprised of BB bonds. Overall, GLD has provided lower returns than HYG over the past ten years.
In this article, we’ll compare GLD vs. HYG. We’ll look at portfolio growth and risk metrics, as well as at their holdings and annual returns. Moreover, I’ll also discuss GLD’s and HYG’s performance, fund composition, and industry exposure and examine how these affect their overall returns.
|Name||SPDR Gold Shares||iShares iBoxx $ High Yield Corporate Bond ETF|
|Category||N/A||High Yield Bond|
|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 iBoxx $ High Yield Corporate Bond ETF (HYG) is a High Yield Bond fund that is issued by iShares. It currently has 20.03B total assets under management and has yielded an average annual return of 6.42% over the past 10 years. The fund has a dividend yield of 4.44% with an expense ratio of 0.48%.
GLD’s dividend yield is 4.44% lower than that of HYG (0.0% vs. 4.44%). Also, GLD yielded on average 0.61% less per year over the past decade (5.81% vs. 6.42%). The expense ratio of GLD is 0.08 percentage points lower than HYG’s (0.4% vs. 0.48%).
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%.
|HYG Bond Sectors||Weight|
HYG’s Top Bond Sectors are ratings of BB, B, Below B, BBB, and AAA at 56.53%, 31.27%, 11.4%, 0.61%, and 0.28%. The fund is less weighted towards A (0.0%), AA (0.0%), and US Government (0.0%) rated bonds.
The SPDR Gold Shares (GLD) has a Standard Deviation of 16.58 with a Beta of 0.48 and a Alpha of 3.91. Its Treynor Ratio is 1.21 while GLD’s R-squared is 16.21. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Mean Return of 0.21.
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has a Mean Return of 0.46 with a Beta of 0.48 and a Sharpe Ratio of 0.7. Its Standard Deviation is 6.96 while HYG’s Treynor Ratio is 10.01. Furthermore, the fund has a R-squared of 4.1 and a Alpha of 3.58.
GLD’s Mean Return is 0.25 points lower than that of HYG and its R-squared is 12.11 points higher. With a Standard Deviation of 16.58, GLD is slightly more volatile than HYG. The Alpha and Beta of GLD are 0.33 points higher and 0.00 points lower than HYG’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 2019 was the strongest year for HYG, returning 14.23% on an annual basis. The poorest year for HYG in the last ten years was 2015, with a yield of -5.55%. Most years the iShares iBoxx $ High Yield Corporate Bond ETF has given investors modest returns, such as in 2011, 2013, and 2017, when gains were 5.89%, 5.9%, and 6.09% 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 HYG, the end total would have been $19,427. This equates to a $9,427 profit over 11 years and a compound annual growth rate (CAGR) of 6.42%.
GLD’s CAGR is 0.61 percentage points lower than that of HYG and as a result, would have yielded $3,032 less on a $10,000 investment. Thus, GLD performed worse than HYG by 0.61% annually.
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