GLD vs. SCHP: What’s The Difference?

The SPDR Gold Shares (GLD) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between GLD and SCHP? And which fund is better?

The expense ratio of GLD is 0.35 percentage points higher than SCHP’s (0.4% vs. 0.05%). GLD also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, GLD has provided higher returns than SCHP over the past ten years.

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

Summary

GLD SCHP
Name SPDR Gold Shares Schwab U.S. TIPS ETF
Category N/A Inflation-Protected Bond
Issuer SPDR State Street Global Advisors Schwab ETFs
AUM 59.26B 18.41B
Avg. Return 5.81% 3.92%
Div. Yield 0.0% 1.97%
Expense Ratio 0.4% 0.05%

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. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.

GLD’s dividend yield is 1.97% lower than that of SCHP (0.0% vs. 1.97%). Also, GLD yielded on average 1.89% more per year over the past decade (5.81% vs. 3.92%). The expense ratio of GLD is 0.35 percentage points higher than SCHP’s (0.4% vs. 0.05%).

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

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%.

SCHP - Holdings

SCHP Bond Sectors Weight
AAA 100.0%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 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.

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 SCHP
Mean Return 0.21 0.28
R-squared 16.21 66.16
Std. Deviation 16.58 4.32
Alpha 3.91 -0.5
Beta 0.48 1.17
Sharpe Ratio 0.12 0.64
Treynor Ratio 1.21 2.31

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

The Schwab U.S. TIPS ETF (SCHP) has a Beta of 1.17 with a Treynor Ratio of 2.31 and a Standard Deviation of 4.32. Its Mean Return is 0.28 while SCHP’s R-squared is 66.16. Furthermore, the fund has a Alpha of -0.5 and a Sharpe Ratio of 0.64.

GLD’s Mean Return is 0.07 points lower than that of SCHP and its R-squared is 49.95 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than SCHP. The Alpha and Beta of GLD are 4.41 points higher and 0.69 points lower than SCHP’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. SCHP - Annual Returns

Year GLD SCHP
2020 23.68% 10.94%
2019 18.36% 8.36%
2018 -1.54% -1.31%
2017 11.41% 2.95%
2016 8.69% 4.6%
2015 -11.78% -1.5%
2014 -0.58% 3.56%
2013 -28.09% -8.66%
2012 5.26% 6.83%
2011 11.2% 13.38%
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 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.

Portfolio Growth

GLD vs. SCHP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $12,884 5.81%
SCHP $10,000 $14,418 3.92%

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 SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.

GLD’s CAGR is 1.89 percentage points higher than that of SCHP and as a result, would have yielded $1,534 less on a $10,000 investment. Thus, GLD outperformed SCHP by 1.89% 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