GLD vs. SCHB: What’s The Difference?

The SPDR Gold Shares (GLD) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between GLD and SCHB? And which fund is better?

The expense ratio of GLD is 0.37 percentage points higher than SCHB’s (0.4% vs. 0.03%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than SCHB over the past ten years.

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

Summary

GLD SCHB
Name SPDR Gold Shares Schwab U.S. Broad Market ETF
Category N/A Large Blend
Issuer SPDR State Street Global Advisors Schwab ETFs
AUM 59.26B 21.44B
Avg. Return 5.81% 14.43%
Div. Yield 0.0% 1.39%
Expense Ratio 0.4% 0.03%

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 Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

GLD’s dividend yield is 1.39% lower than that of SCHB (0.0% vs. 1.39%). Also, GLD yielded on average 8.63% less per year over the past decade (5.81% vs. 14.43%). The expense ratio of GLD is 0.37 percentage points higher than SCHB’s (0.4% vs. 0.03%).

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Fund Composition

Industry Exposure

GLD vs. SCHB - Industry Exposure

GLD SCHB
Technology 0.0% 24.15%
Industrials 0.0% 9.29%
Energy 0.0% 2.78%
Communication Services 0.0% 10.52%
Utilities 0.0% 2.32%
Healthcare 0.0% 13.37%
Consumer Defensive 0.0% 5.76%
Real Estate 0.0% 3.58%
Financial Services 0.0% 13.88%
Consumer Cyclical 0.0% 11.9%
Basic Materials 0.0% 2.45%

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 Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

GLD is 24.15% less exposed to the Technology sector than SCHB (0.0% vs 24.15%). GLD’s exposure to Industrials and Energy stocks is 9.29% lower and 2.78% lower respectively (0.0% vs. 9.29% and 0.0% vs. 2.78%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 29.36% less of the fund’s holdings compared to SCHB (0.00% vs. 29.36%).

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%.

SCHB - Holdings

SCHB Holdings Weight
Apple Inc 4.86%
Microsoft Corp 4.61%
Amazon.com Inc 3.33%
Facebook Inc A 1.88%
Alphabet Inc A 1.66%
Alphabet Inc Class C 1.61%
Berkshire Hathaway Inc Class B 1.19%
Tesla Inc 1.18%
NVIDIA Corp 1.13%
JPMorgan Chase & Co 1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

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Risk Analysis

GLD SCHB
Mean Return 0.21 1.23
R-squared 16.21 99.33
Std. Deviation 16.58 14.12
Alpha 3.91 -0.58
Beta 0.48 1.04
Sharpe Ratio 0.12 1
Treynor Ratio 1.21 13.58

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

The Schwab U.S. Broad Market ETF (SCHB) has a Standard Deviation of 14.12 with a Sharpe Ratio of 1 and a Beta of 1.04. Its Mean Return is 1.23 while SCHB’s R-squared is 99.33. Furthermore, the fund has a Alpha of -0.58 and a Treynor Ratio of 13.58.

GLD’s Mean Return is 1.02 points lower than that of SCHB and its R-squared is 83.12 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than SCHB. The Alpha and Beta of GLD are 4.49 points higher and 0.56 points lower than SCHB’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. SCHB - Annual Returns

Year GLD SCHB
2020 23.68% 20.77%
2019 18.36% 30.94%
2018 -1.54% -5.25%
2017 11.41% 21.18%
2016 8.69% 12.56%
2015 -11.78% 0.45%
2014 -0.58% 12.67%
2013 -28.09% 33.37%
2012 5.26% 16.22%
2011 11.2% 1.4%
2010 27.25% 17.1%

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 2013 was the strongest year for SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.

Portfolio Growth

GLD vs. SCHB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $12,884 5.81%
SCHB $10,000 $36,354 14.43%

A $10,000 investment in GLD would have resulted in a final balance of $12,884. This is a profit of $2,884 over 10 years and amounts to a compound annual growth rate (CAGR) of 5.81%.

With a $10,000 investment in SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.

GLD’s CAGR is 8.63 percentage points lower than that of SCHB and as a result, would have yielded $23,470 less on a $10,000 investment. Thus, GLD performed worse than SCHB by 8.63% annually.


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