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GLD vs. PFF: What’s The Difference?

The SPDR Gold Shares (GLD) and the iShares Preferred and Income Securities ETF (PFF) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and PFF is a iShares Preferred Stock fund. So, what’s the difference between GLD and PFF? And which fund is better?

The expense ratio of GLD is 0.06 percentage points lower than PFF’s (0.4% vs. 0.46%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than PFF over the past ten years.

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

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Summary

GLDPFF
NameSPDR Gold SharesiShares Preferred and Income Securities ETF
CategoryN/APreferred Stock
IssuerSPDR State Street Global AdvisorsiShares
AUM59.26B19.8B
Avg. Return5.81%6.90%
Div. Yield0.0%4.47%
Expense Ratio0.4%0.46%

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 Preferred and Income Securities ETF (PFF) is a Preferred Stock fund that is issued by iShares. It currently has 19.8B total assets under management and has yielded an average annual return of 6.90% over the past 10 years. The fund has a dividend yield of 4.47% with an expense ratio of 0.46%.

GLD’s dividend yield is 4.47% lower than that of PFF (0.0% vs. 4.47%). Also, GLD yielded on average 1.09% less per year over the past decade (5.81% vs. 6.90%). The expense ratio of GLD is 0.06 percentage points lower than PFF’s (0.4% vs. 0.46%).

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Fund Composition

Industry Exposure

GLD vs. PFF - Industry Exposure

GLDPFF
Technology0.0%0.0%
Industrials0.0%10.27%
Energy0.0%0.0%
Communication Services0.0%0.0%
Utilities0.0%81.81%
Healthcare0.0%3.54%
Consumer Defensive0.0%0.0%
Real Estate0.0%0.65%
Financial Services0.0%0.0%
Consumer Cyclical0.0%0.0%
Basic Materials0.0%3.74%

The SPDR Gold Shares (GLD) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

GLD’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

The iShares Preferred and Income Securities ETF (PFF) has the most exposure to the Utilities sector at 81.81%. This is followed by Industrials and Basic Materials at 10.27% and 3.74% respectively. Financial Services (0.0%), Consumer Defensive (0.0%), and Communication Services (0.0%) only make up 0.00% of the fund’s total assets.

PFF’s mid-section with moderate exposure is comprised of Energy, Technology, Real Estate, Healthcare, and Basic Materials stocks at 0.0%, 0.0%, 0.65%, 3.54%, and 3.74%.

GLD is 0.00% less exposed to the Technology sector than PFF (0.0% vs 0.0%). GLD’s exposure to Industrials and Energy stocks is 10.27% lower and 0.00% lower respectively (0.0% vs. 10.27% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.65% less of the fund’s holdings compared to PFF (0.00% vs. 0.65%).

Holdings

GLD - Holdings

GLD HoldingsWeight
Gold Trust100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

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%.

PFF - Holdings

PFF HoldingsWeight
Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A2.54%
BlackRock Cash Funds Treasury SL Agency2.3%
Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-1.79%
Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-1.49%
ArcelorMittal S.A. 5.5%1.36%
Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A1.35%
Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B1.14%
NextEra Energy Inc Unit1.12%
Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.41.08%
Avantor Inc Ser A0.99%

PFF’s Top Holdings are Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A, BlackRock Cash Funds Treasury SL Agency, Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-, Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-, and ArcelorMittal S.A. 5.5% at 2.54%, 2.3%, 1.79%, 1.49%, and 1.36%.

Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A (1.35%), Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B (1.14%), and NextEra Energy Inc Unit (1.12%) have a slightly smaller but still significant weight. Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4 and Avantor Inc Ser A are also represented in the PFF’s holdings at 1.08% and 0.99%.

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Risk Analysis

GLDPFF
Mean Return0.210.52
R-squared16.219.39
Std. Deviation16.587.87
Alpha3.913.45
Beta0.480.81
Sharpe Ratio0.120.72
Treynor Ratio1.216.79

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

The iShares Preferred and Income Securities ETF (PFF) has a Alpha of 3.45 with a Standard Deviation of 7.87 and a Beta of 0.81. Its Sharpe Ratio is 0.72 while PFF’s Mean Return is 0.52. Furthermore, the fund has a Treynor Ratio of 6.79 and a R-squared of 9.39.

GLD’s Mean Return is 0.31 points lower than that of PFF and its R-squared is 6.82 points higher. With a Standard Deviation of 16.58, GLD is slightly more volatile than PFF. The Alpha and Beta of GLD are 0.46 points higher and 0.33 points lower than PFF’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. PFF - Annual Returns

YearGLDPFF
202023.68%7.94%
201918.36%15.62%
2018-1.54%-4.77%
201711.41%8.33%
20168.69%1.26%
2015-11.78%4.62%
2014-0.58%13.45%
2013-28.09%-0.59%
20125.26%18.25%
201111.2%-2.2%
201027.25%13.96%

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 2012 was the strongest year for PFF, returning 18.25% on an annual basis. The poorest year for PFF in the last ten years was 2018, with a yield of -4.77%. Most years the iShares Preferred and Income Securities ETF has given investors modest returns, such as in 2015, 2020, and 2017, when gains were 4.62%, 7.94%, and 8.33% respectively.

Portfolio Growth

GLD vs. PFF - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
GLD$10,000$16,3955.81%
PFF$10,000$20,2726.90%

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 PFF, the end total would have been $20,272. This equates to a $10,272 profit over 11 years and a compound annual growth rate (CAGR) of 6.90%.

GLD’s CAGR is 1.09 percentage points lower than that of PFF and as a result, would have yielded $3,877 less on a $10,000 investment. Thus, GLD performed worse than PFF by 1.09% annually.


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