GLD vs. QUAL: What’s The Difference?

The SPDR Gold Shares (GLD) and the iShares MSCI USA Quality Factor ETF (QUAL) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and QUAL is a iShares Large Blend fund. So, what’s the difference between GLD and QUAL? And which fund is better?

The expense ratio of GLD is 0.25 percentage points higher than QUAL’s (0.4% vs. 0.15%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than QUAL over the past ten years.

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

Summary

GLD QUAL
Name SPDR Gold Shares iShares MSCI USA Quality Factor ETF
Category N/A Large Blend
Issuer SPDR State Street Global Advisors iShares
AUM 59.26B 23.93B
Avg. Return 5.81% 13.42%
Div. Yield 0.0% 1.29%
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 MSCI USA Quality Factor ETF (QUAL) is a Large Blend fund that is issued by iShares. It currently has 23.93B total assets under management and has yielded an average annual return of 13.42% over the past 10 years. The fund has a dividend yield of 1.29% with an expense ratio of 0.15%.

GLD’s dividend yield is 1.29% lower than that of QUAL (0.0% vs. 1.29%). Also, GLD yielded on average 7.62% less per year over the past decade (5.81% vs. 13.42%). The expense ratio of GLD is 0.25 percentage points higher than QUAL’s (0.4% vs. 0.15%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

GLD vs. QUAL - Industry Exposure

GLD QUAL
Technology 0.0% 22.52%
Industrials 0.0% 9.22%
Energy 0.0% 2.24%
Communication Services 0.0% 11.44%
Utilities 0.0% 2.41%
Healthcare 0.0% 13.22%
Consumer Defensive 0.0% 8.57%
Real Estate 0.0% 2.72%
Financial Services 0.0% 15.87%
Consumer Cyclical 0.0% 9.43%
Basic Materials 0.0% 2.35%

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 MSCI USA Quality Factor ETF (QUAL) has the most exposure to the Technology sector at 22.52%. This is followed by Financial Services and Healthcare at 15.87% and 13.22% respectively. Basic Materials (2.35%), Utilities (2.41%), and Real Estate (2.72%) only make up 7.48% of the fund’s total assets.

QUAL’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 8.57%, 9.22%, 9.43%, 11.44%, and 13.22%.

GLD is 22.52% less exposed to the Technology sector than QUAL (0.0% vs 22.52%). GLD’s exposure to Industrials and Energy stocks is 9.22% lower and 2.24% lower respectively (0.0% vs. 9.22% and 0.0% vs. 2.24%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 28.02% less of the fund’s holdings compared to QUAL (0.00% vs. 28.02%).

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%.

QUAL - Holdings

QUAL Holdings Weight
Facebook Inc Class A 4.77%
Nike Inc Class B 4.05%
Microsoft Corp 3.54%
Apple Inc 3.52%
Johnson & Johnson 2.99%
BlackRock Inc 2.87%
Target Corp 2.8%
Mastercard Inc Class A 2.72%
NVIDIA Corp 2.71%
Alphabet Inc Class A 2.49%

QUAL’s Top Holdings are Facebook Inc Class A, Nike Inc Class B, Microsoft Corp, Apple Inc, and Johnson & Johnson at 4.77%, 4.05%, 3.54%, 3.52%, and 2.99%.

BlackRock Inc (2.87%), Target Corp (2.8%), and Mastercard Inc Class A (2.72%) have a slightly smaller but still significant weight. NVIDIA Corp and Alphabet Inc Class A are also represented in the QUAL’s holdings at 2.71% and 2.49%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

GLD QUAL
Mean Return 0.21 0
R-squared 16.21 0
Std. Deviation 16.58 0
Alpha 3.91 0
Beta 0.48 0
Sharpe Ratio 0.12 0
Treynor Ratio 1.21 0

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

The iShares MSCI USA Quality Factor ETF (QUAL) has a Standard Deviation of 0 with a Mean Return of 0 and a Alpha of 0. Its Beta is 0 while QUAL’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.

GLD’s Mean Return is 0.21 points higher than that of QUAL and its R-squared is 16.21 points higher. With a Standard Deviation of 16.58, GLD is slightly more volatile than QUAL. The Alpha and Beta of GLD are 3.91 points higher and 0.48 points higher than QUAL’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Gemini - the simplest and cheapest broker I've found! Click here to read more (link to Gemini).

Performance

Annual Returns

GLD vs. QUAL - Annual Returns

Year GLD QUAL
2020 23.68% 16.96%
2019 18.36% 34.14%
2018 -1.54% -5.77%
2017 11.41% 22.26%
2016 8.69% 9.18%
2015 -11.78% 5.56%
2014 -0.58% 11.62%
2013 -28.09% 0.0%
2012 5.26% 0.0%
2011 11.2% 0.0%
2010 27.25% 0.0%

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 QUAL, returning 34.14% on an annual basis. The poorest year for QUAL in the last ten years was 2018, with a yield of -5.77%. Most years the iShares MSCI USA Quality Factor ETF has given investors modest returns, such as in 2010, 2015, and 2016, when gains were 0.0%, 5.56%, and 9.18% respectively.

Portfolio Growth

GLD vs. QUAL - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $15,308 5.81%
QUAL $10,000 $23,251 13.42%

A $10,000 investment in GLD would have resulted in a final balance of $15,308. This is a profit of $5,308 over 7 years and amounts to a compound annual growth rate (CAGR) of 5.81%.

With a $10,000 investment in QUAL, the end total would have been $23,251. This equates to a $13,251 profit over 7 years and a compound annual growth rate (CAGR) of 13.42%.

GLD’s CAGR is 7.62 percentage points lower than that of QUAL and as a result, would have yielded $7,943 less on a $10,000 investment. Thus, GLD performed worse than QUAL by 7.62% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply