The SPDR Gold Shares (GLD) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and TLT is a iShares Long Government fund. So, what’s the difference between GLD and TLT? And which fund is better?
The expense ratio of GLD is 0.25 percentage points higher than TLT’s (0.4% vs. 0.15%). GLD also has a high exposure to the technology sector while TLT is mostly comprised of AAA bonds. Overall, GLD has provided lower returns than TLT over the past ten years.
In this article, we’ll compare GLD vs. TLT. We’ll look at annual returns and fund composition, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss GLD’s and TLT’s performance, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| GLD | TLT | |
| Name | SPDR Gold Shares | iShares 20+ Year Treasury Bond ETF |
| Category | N/A | Long Government |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 59.26B | 15.15B |
| Avg. Return | 5.81% | 9.00% |
| Div. Yield | 0.0% | 1.5% |
| 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 20+ Year Treasury Bond ETF (TLT) is a Long Government fund that is issued by iShares. It currently has 15.15B total assets under management and has yielded an average annual return of 9.00% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.
GLD’s dividend yield is 1.50% lower than that of TLT (0.0% vs. 1.5%). Also, GLD yielded on average 3.19% less per year over the past decade (5.81% vs. 9.00%). The expense ratio of GLD is 0.25 percentage points higher than TLT’s (0.4% vs. 0.15%).
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%.
| TLT 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% |
TLT’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.
Risk Analysis
| GLD | TLT | |
| Mean Return | 0.21 | 0.63 |
| R-squared | 16.21 | 68.76 |
| Std. Deviation | 16.58 | 12.76 |
| Alpha | 3.91 | -2.83 |
| Beta | 0.48 | 3.54 |
| Sharpe Ratio | 0.12 | 0.55 |
| Treynor Ratio | 1.21 | 1.82 |
The SPDR Gold Shares (GLD) has a Beta of 0.48 with a Mean Return of 0.21 and a Sharpe Ratio of 0.12. Its Alpha is 3.91 while GLD’s Standard Deviation is 16.58. Furthermore, the fund has a R-squared of 16.21 and a Treynor Ratio of 1.21.
The iShares 20+ Year Treasury Bond ETF (TLT) has a Beta of 3.54 with a Sharpe Ratio of 0.55 and a Treynor Ratio of 1.82. Its Mean Return is 0.63 while TLT’s R-squared is 68.76. Furthermore, the fund has a Alpha of -2.83 and a Standard Deviation of 12.76.
GLD’s Mean Return is 0.42 points lower than that of TLT and its R-squared is 52.55 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than TLT. The Alpha and Beta of GLD are 6.74 points higher and 3.06 points lower than TLT’s Alpha and Beta.
Performance
Annual Returns
| Year | GLD | TLT |
| 2020 | 23.68% | 17.92% |
| 2019 | 18.36% | 14.93% |
| 2018 | -1.54% | -2.07% |
| 2017 | 11.41% | 8.92% |
| 2016 | 8.69% | 1.36% |
| 2015 | -11.78% | -1.65% |
| 2014 | -0.58% | 27.35% |
| 2013 | -28.09% | -13.91% |
| 2012 | 5.26% | 3.25% |
| 2011 | 11.2% | 33.6% |
| 2010 | 27.25% | 9.25% |
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 TLT, returning 33.6% on an annual basis. The poorest year for TLT in the last ten years was 2013, with a yield of -13.91%. Most years the iShares 20+ Year Treasury Bond ETF has given investors modest returns, such as in 2012, 2017, and 2010, when gains were 3.25%, 8.92%, and 9.25% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| GLD | $10,000 | $16,395 | 5.81% |
| TLT | $10,000 | $23,809 | 9.00% |
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 TLT, the end total would have been $23,809. This equates to a $13,809 profit over 11 years and a compound annual growth rate (CAGR) of 9.00%.
GLD’s CAGR is 3.19 percentage points lower than that of TLT and as a result, would have yielded $7,414 less on a $10,000 investment. Thus, GLD performed worse than TLT by 3.19% annually.
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