The SPDR Gold Shares (GLD) and the iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and IGSB is a iShares Short-Term Bond fund. So, what’s the difference between GLD and IGSB? And which fund is better?
The expense ratio of GLD is 0.34 percentage points higher than IGSB’s (0.4% vs. 0.06%). GLD also has a high exposure to the technology sector while IGSB is mostly comprised of BBB bonds. Overall, GLD has provided higher returns than IGSB over the past ten years.
In this article, we’ll compare GLD vs. IGSB. We’ll look at fund composition and industry exposure, as well as at their risk metrics and performance. Moreover, I’ll also discuss GLD’s and IGSB’s holdings, portfolio growth, and annual returns and examine how these affect their overall returns.
Summary
| GLD | IGSB | |
| NameSPDR Gold SharesiShares 1-5 Year Investment Grade Corporate Bond ETF | ||
| Category | N/A | Short-Term Bond |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 59.26B | 26.63B |
| Avg. Return | 5.81% | 2.51% |
| Div. Yield | 0.0% | 2.02% |
| Expense Ratio | 0.4% | 0.06% |
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 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is a Short-Term Bond fund that is issued by iShares. It currently has 26.63B total assets under management and has yielded an average annual return of 2.51% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.06%.
GLD’s dividend yield is 2.02% lower than that of IGSB (0.0% vs. 2.02%). Also, GLD yielded on average 3.30% more per year over the past decade (5.81% vs. 2.51%). The expense ratio of GLD is 0.34 percentage points higher than IGSB’s (0.4% vs. 0.06%).
Fund Composition
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%.
| IGSB Bond Sectors | Weight |
| BBB | 50.48% |
| A | 40.04% |
| AA | 7.46% |
| AAA | 2.21% |
| BB | 0.09% |
| Below B | 0.0% |
| B | 0.0% |
| US Government | 0.0% |
| Others | -0.28% |
IGSB’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and BB at 50.48%, 40.04%, 7.46%, 2.21%, and 0.09%. The fund is less weighted towards Below B (0.0%), B (0.0%), and US Government (0.0%) rated bonds.
Risk Analysis
| GLD | IGSB | |
| Mean Return | 0.21 | 0.19 |
| R-squared | 16.21 | 26.13 |
| Std. Deviation | 16.58 | 2 |
| Alpha | 3.91 | 0.69 |
| Beta | 0.48 | 0.34 |
| Sharpe Ratio | 0.12 | 0.82 |
| Treynor Ratio | 1.21 | 4.82 |
The SPDR Gold Shares (GLD) has a Standard Deviation of 16.58 with a Mean Return of 0.21 and a R-squared of 16.21. Its Alpha is 3.91 while GLD’s Treynor Ratio is 1.21. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Beta of 0.48.
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a Mean Return of 0.19 with a Standard Deviation of 2 and a Beta of 0.34. Its R-squared is 26.13 while IGSB’s Treynor Ratio is 4.82. Furthermore, the fund has a Alpha of 0.69 and a Sharpe Ratio of 0.82.
GLD’s Mean Return is 0.02 points higher than that of IGSB and its R-squared is 9.92 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than IGSB. The Alpha and Beta of GLD are 3.22 points higher and 0.14 points higher than IGSB’s Alpha and Beta.
Performance
Annual Returns
| Year | GLD | IGSB |
| 2020 | 23.68% | 5.26% |
| 2019 | 18.36% | 7.01% |
| 2018 | -1.54% | 1.34% |
| 2017 | 11.41% | 1.41% |
| 2016 | 8.69% | 1.77% |
| 2015 | -11.78% | 0.7% |
| 2014 | -0.58% | 0.74% |
| 2013 | -28.09% | 1.03% |
| 2012 | 5.26% | 3.28% |
| 2011 | 11.2% | 1.34% |
| 2010 | 27.25% | 3.69% |
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 IGSB, returning 7.01% on an annual basis. The poorest year for IGSB in the last ten years was 2015, with a yield of 0.7%. Most years the iShares 1-5 Year Investment Grade Corporate Bond ETF has given investors modest returns, such as in 2011, 2017, and 2016, when gains were 1.34%, 1.41%, and 1.77% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| GLD | $10,000 | $16,395 | 5.81% |
| IGSB | $10,000 | $13,103 | 2.51% |
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 IGSB, the end total would have been $13,103. This equates to a $3,103 profit over 11 years and a compound annual growth rate (CAGR) of 2.51%.
GLD’s CAGR is 3.30 percentage points higher than that of IGSB and as a result, would have yielded $3,292 more on a $10,000 investment. Thus, GLD outperformed IGSB by 3.30% annually.
