GLD vs. USMV: What’s The Difference?

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

The expense ratio of GLD is 0.25 percentage points higher than USMV’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 USMV over the past ten years.

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

Summary

GLD USMV
Name SPDR Gold Shares iShares MSCI USA Min Vol Factor ETF
Category N/A Large Blend
Issuer SPDR State Street Global Advisors iShares
AUM 59.26B 27.6B
Avg. Return 5.81% 13.89%
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 MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% 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 USMV (0.0% vs. 1.5%). Also, GLD yielded on average 8.09% less per year over the past decade (5.81% vs. 13.89%). The expense ratio of GLD is 0.25 percentage points higher than USMV’s (0.4% vs. 0.15%).

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Fund Composition

Industry Exposure

GLD vs. USMV - Industry Exposure

GLD USMV
Technology 0.0% 20.53%
Industrials 0.0% 10.51%
Energy 0.0% 0.21%
Communication Services 0.0% 11.03%
Utilities 0.0% 6.93%
Healthcare 0.0% 18.42%
Consumer Defensive 0.0% 12.82%
Real Estate 0.0% 2.73%
Financial Services 0.0% 9.65%
Consumer Cyclical 0.0% 5.53%
Basic Materials 0.0% 1.65%

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 Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

GLD is 20.53% less exposed to the Technology sector than USMV (0.0% vs 20.53%). GLD’s exposure to Industrials and Energy stocks is 10.51% lower and 0.21% lower respectively (0.0% vs. 10.51% and 0.0% vs. 0.21%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 17.91% less of the fund’s holdings compared to USMV (0.00% vs. 17.91%).

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%.

USMV - Holdings

USMV Holdings Weight
Eli Lilly and Co 1.64%
Microsoft Corp 1.62%
T-Mobile US Inc 1.51%
Accenture PLC Class A 1.51%
Visa Inc Class A 1.49%
Waste Management Inc 1.45%
Adobe Inc 1.45%
The Kroger Co 1.44%
Johnson & Johnson 1.42%
Gilead Sciences Inc 1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

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Risk Analysis

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

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

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

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Performance

Annual Returns

GLD vs. USMV - Annual Returns

Year GLD USMV
2020 23.68% 5.6%
2019 18.36% 27.77%
2018 -1.54% 1.36%
2017 11.41% 18.97%
2016 8.69% 10.5%
2015 -11.78% 5.5%
2014 -0.58% 16.34%
2013 -28.09% 25.11%
2012 5.26% 11.04%
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 USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.

Portfolio Growth

GLD vs. USMV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $11,007 5.81%
USMV $10,000 $27,607 13.89%

A $10,000 investment in GLD would have resulted in a final balance of $11,007. This is a profit of $1,007 over 8 years and amounts to a compound annual growth rate (CAGR) of 5.81%.

With a $10,000 investment in USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.

GLD’s CAGR is 8.09 percentage points lower than that of USMV and as a result, would have yielded $16,600 less on a $10,000 investment. Thus, GLD performed worse than USMV by 8.09% annually.


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