GLD vs. IEF: What’s The Difference?

The SPDR Gold Shares (GLD) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and IEF is a iShares Long Government fund. So, what’s the difference between GLD and IEF? And which fund is better?

The expense ratio of GLD is 0.25 percentage points higher than IEF’s (0.4% vs. 0.15%). GLD also has a high exposure to the technology sector while IEF is mostly comprised of AAA bonds. Overall, GLD has provided higher returns than IEF over the past ten years.

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

Summary

GLD IEF
Name SPDR Gold Shares iShares 7-10 Year Treasury Bond ETF
Category N/A Long Government
Issuer SPDR State Street Global Advisors iShares
AUM 59.26B 13.44B
Avg. Return 5.81% 5.06%
Div. Yield 0.0% 0.84%
Expense Ratio 0.4% 0.15%

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 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.

GLD’s dividend yield is 0.84% lower than that of IEF (0.0% vs. 0.84%). Also, GLD yielded on average 0.74% more per year over the past decade (5.81% vs. 5.06%). The expense ratio of GLD is 0.25 percentage points higher than IEF’s (0.4% vs. 0.15%).

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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%.

IEF - Holdings

IEF 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%

IEF’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 IEF
Mean Return 0.21 0.32
R-squared 16.21 77.56
Std. Deviation 16.58 5.42
Alpha 3.91 -1.2
Beta 0.48 1.59
Sharpe Ratio 0.12 0.6
Treynor Ratio 1.21 1.97

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

The iShares 7-10 Year Treasury Bond ETF (IEF) has a Mean Return of 0.32 with a Beta of 1.59 and a R-squared of 77.56. Its Treynor Ratio is 1.97 while IEF’s Standard Deviation is 5.42. Furthermore, the fund has a Sharpe Ratio of 0.6 and a Alpha of -1.2.

GLD’s Mean Return is 0.11 points lower than that of IEF and its R-squared is 61.35 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than IEF. The Alpha and Beta of GLD are 5.11 points higher and 1.11 points lower than IEF’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. IEF - Annual Returns

Year GLD IEF
2020 23.68% 9.84%
2019 18.36% 8.38%
2018 -1.54% 0.82%
2017 11.41% 2.47%
2016 8.69% 1.0%
2015 -11.78% 1.55%
2014 -0.58% 8.92%
2013 -28.09% -6.12%
2012 5.26% 4.06%
2011 11.2% 15.46%
2010 27.25% 9.29%

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 2011 was the strongest year for IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% respectively.

Portfolio Growth

GLD vs. IEF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $16,395 5.81%
IEF $10,000 $16,936 5.06%

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 IEF, the end total would have been $16,936. This equates to a $6,936 profit over 11 years and a compound annual growth rate (CAGR) of 5.06%.

GLD’s CAGR is 0.74 percentage points higher than that of IEF and as a result, would have yielded $541 less on a $10,000 investment. Thus, GLD outperformed IEF by 0.74% annually.


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