The SPDR Gold Shares (GLD) and the iShares MBS ETF (MBB) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and MBB is a iShares Intermediate Government fund. So, what’s the difference between GLD and MBB? And which fund is better?
The expense ratio of GLD is 0.34 percentage points higher than MBB’s (0.4% vs. 0.06%). GLD also has a high exposure to the technology sector while MBB is mostly comprised of AAA bonds. Overall, GLD has provided higher returns than MBB over the past ten years.
In this article, we’ll compare GLD vs. MBB. We’ll look at holdings and annual returns, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss GLD’s and MBB’s risk metrics, performance, and portfolio growth and examine how these affect their overall returns.
Summary
| GLD | MBB | |
| Name | SPDR Gold Shares | iShares MBS ETF |
| Category | N/A | Intermediate Government |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 59.26B | 25.69B |
| Avg. Return | 5.81% | 3.08% |
| Div. Yield | 0.0% | 1.88% |
| 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 MBS ETF (MBB) is a Intermediate Government fund that is issued by iShares. It currently has 25.69B total assets under management and has yielded an average annual return of 3.08% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.06%.
GLD’s dividend yield is 1.88% lower than that of MBB (0.0% vs. 1.88%). Also, GLD yielded on average 2.73% more per year over the past decade (5.81% vs. 3.08%). The expense ratio of GLD is 0.34 percentage points higher than MBB’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%.
| MBB Bond Sectors | Weight |
| AAA | 99.51% |
| Others | 0.49% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
MBB’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.51%, 0.49%, 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.
Risk Analysis
| GLD | MBB | |
| Mean Return | 0.21 | 0.2 |
| R-squared | 16.21 | 74.38 |
| Std. Deviation | 16.58 | 2.12 |
| Alpha | 3.91 | 0.14 |
| Beta | 0.48 | 0.6 |
| Sharpe Ratio | 0.12 | 0.87 |
| Treynor Ratio | 1.21 | 3.02 |
The SPDR Gold Shares (GLD) has a Mean Return of 0.21 with a Beta of 0.48 and a R-squared of 16.21. Its Treynor Ratio is 1.21 while GLD’s Sharpe Ratio is 0.12. Furthermore, the fund has a Alpha of 3.91 and a Standard Deviation of 16.58.
The iShares MBS ETF (MBB) has a Mean Return of 0.2 with a R-squared of 74.38 and a Sharpe Ratio of 0.87. Its Alpha is 0.14 while MBB’s Standard Deviation is 2.12. Furthermore, the fund has a Treynor Ratio of 3.02 and a Beta of 0.6.
GLD’s Mean Return is 0.01 points higher than that of MBB and its R-squared is 58.17 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than MBB. The Alpha and Beta of GLD are 3.77 points higher and 0.12 points lower than MBB’s Alpha and Beta.
Performance
Annual Returns
| Year | GLD | MBB |
| 2020 | 23.68% | 4.03% |
| 2019 | 18.36% | 6.27% |
| 2018 | -1.54% | 0.81% |
| 2017 | 11.41% | 2.37% |
| 2016 | 8.69% | 1.28% |
| 2015 | -11.78% | 1.28% |
| 2014 | -0.58% | 6.16% |
| 2013 | -28.09% | -1.92% |
| 2012 | 5.26% | 2.23% |
| 2011 | 11.2% | 5.88% |
| 2010 | 27.25% | 5.44% |
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 MBB, returning 6.27% on an annual basis. The poorest year for MBB in the last ten years was 2013, with a yield of -1.92%. Most years the iShares MBS ETF has given investors modest returns, such as in 2012, 2017, and 2020, when gains were 2.23%, 2.37%, and 4.03% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| GLD | $10,000 | $16,395 | 5.81% |
| MBB | $10,000 | $13,906 | 3.08% |
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 MBB, the end total would have been $13,906. This equates to a $3,906 profit over 11 years and a compound annual growth rate (CAGR) of 3.08%.
GLD’s CAGR is 2.73 percentage points higher than that of MBB and as a result, would have yielded $2,489 more on a $10,000 investment. Thus, GLD outperformed MBB by 2.73% annually.
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