The SPDR Gold Shares (GLD) and the Vanguard Small-Cap Index Fund ETF Shares (VB) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and VB is a Vanguard Small Blend fund. So, what’s the difference between GLD and VB? And which fund is better?
The expense ratio of GLD is 0.35 percentage points higher than VB’s (0.4% vs. 0.05%). GLD also has a lower exposure to the technology sector and a lower standard deviation. Overall, GLD has provided lower returns than VB over the past ten years.
In this article, we’ll compare GLD vs. VB. We’ll look at fund composition and industry exposure, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss GLD’s and VB’s performance, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||SPDR Gold Shares||Vanguard Small-Cap Index Fund ETF Shares|
|Issuer||SPDR State Street Global Advisors||Vanguard|
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 Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.
GLD’s dividend yield is 1.14% lower than that of VB (0.0% vs. 1.14%). Also, GLD yielded on average 8.45% less per year over the past decade (5.81% vs. 14.25%). The expense ratio of GLD is 0.35 percentage points higher than VB’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).
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 Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.
VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.
GLD is 16.85% less exposed to the Technology sector than VB (0.0% vs 16.85%). GLD’s exposure to Industrials and Energy stocks is 16.11% lower and 3.67% lower respectively (0.0% vs. 16.11% and 0.0% vs. 3.67%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 35.65% less of the fund’s holdings compared to VB (0.00% vs. 35.65%).
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%.
|Charles River Laboratories International Inc||0.34%|
|Diamondback Energy Inc||0.31%|
|VICI Properties Inc Ordinary Shares||0.3%|
VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.
Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.
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).
The SPDR Gold Shares (GLD) has a Alpha of 3.91 with a Sharpe Ratio of 0.12 and a Beta of 0.48. Its R-squared is 16.21 while GLD’s Standard Deviation is 16.58. Furthermore, the fund has a Treynor Ratio of 1.21 and a Mean Return of 0.21.
The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Standard Deviation of 17.82 with a Treynor Ratio of 10.15 and a R-squared of 85.03. Its Alpha is -4.02 while VB’s Sharpe Ratio is 0.74. Furthermore, the fund has a Beta of 1.21 and a Mean Return of 1.15.
GLD’s Mean Return is 0.94 points lower than that of VB and its R-squared is 68.82 points lower. With a Standard Deviation of 16.58, GLD is slightly less volatile than VB. The Alpha and Beta of GLD are 7.93 points higher and 0.73 points lower than VB’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).
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 VB, returning 37.8% on an annual basis. The poorest year for VB in the last ten years was 2018, with a yield of -9.3%. Most years the Vanguard Small-Cap Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2016, when gains were 16.24%, 18.22%, and 18.31% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VB, the end total would have been $39,734. This equates to a $29,734 profit over 11 years and a compound annual growth rate (CAGR) of 14.25%.
GLD’s CAGR is 8.45 percentage points lower than that of VB and as a result, would have yielded $23,339 less on a $10,000 investment. Thus, GLD performed worse than VB by 8.45% annually.
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.