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GLD vs. VCIT: What’s The Difference?

The SPDR Gold Shares (GLD) and the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and VCIT is a Vanguard Corporate Bond fund. So, what’s the difference between GLD and VCIT? And which fund is better?

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

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

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Summary

GLDVCIT
NameSPDR Gold SharesVanguard Intermediate-Term Corporate Bond Index Fund ETF Shares
CategoryN/ACorporate Bond
IssuerSPDR State Street Global AdvisorsVanguard
AUM59.26B48.39B
Avg. Return5.81%5.84%
Div. Yield0.0%2.33%
Expense Ratio0.4%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 Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) is a Corporate Bond fund that is issued by Vanguard. It currently has 48.39B total assets under management and has yielded an average annual return of 5.84% over the past 10 years. The fund has a dividend yield of 2.33% with an expense ratio of 0.05%.

GLD’s dividend yield is 2.33% lower than that of VCIT (0.0% vs. 2.33%). Also, GLD yielded on average 0.04% less per year over the past decade (5.81% vs. 5.84%). The expense ratio of GLD is 0.35 percentage points higher than VCIT’s (0.4% vs. 0.05%).

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Fund Composition

Holdings

GLD - Holdings

GLD HoldingsWeight
Gold Trust100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

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%.

VCIT - Holdings

VCIT Bond SectorsWeight
BBB55.28%
A37.85%
AA5.22%
AAA1.57%
Below B0.08%
Others0.0%
B0.0%
BB0.0%
US Government0.0%

VCIT’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 55.28%, 37.85%, 5.22%, 1.57%, and 0.08%. The fund is less weighted towards Others (0.0%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

GLDVCIT
Mean Return0.210.44
R-squared16.2163.18
Std. Deviation16.585.08
Alpha3.910.89
Beta0.481.35
Sharpe Ratio0.120.91
Treynor Ratio1.213.43

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

The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) has a Standard Deviation of 5.08 with a Mean Return of 0.44 and a Treynor Ratio of 3.43. Its Sharpe Ratio is 0.91 while VCIT’s Beta is 1.35. Furthermore, the fund has a Alpha of 0.89 and a R-squared of 63.18.

GLD’s Mean Return is 0.23 points lower than that of VCIT and its R-squared is 46.97 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than VCIT. The Alpha and Beta of GLD are 3.02 points higher and 0.87 points lower than VCIT’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. VCIT - Annual Returns

YearGLDVCIT
202023.68%9.55%
201918.36%13.97%
2018-1.54%-1.75%
201711.41%5.5%
20168.69%5.3%
2015-11.78%0.88%
2014-0.58%7.47%
2013-28.09%-1.8%
20125.26%11.36%
201111.2%7.94%
201027.25%10.65%

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 VCIT, returning 13.97% on an annual basis. The poorest year for VCIT in the last ten years was 2013, with a yield of -1.8%. Most years the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2011, when gains were 5.5%, 7.47%, and 7.94% respectively.

Portfolio Growth

GLD vs. VCIT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
GLD$10,000$12,8845.81%
VCIT$10,000$17,4395.84%

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 VCIT, the end total would have been $17,439. This equates to a $7,439 profit over 10 years and a compound annual growth rate (CAGR) of 5.84%.

GLD’s CAGR is 0.04 percentage points lower than that of VCIT and as a result, would have yielded $4,555 less on a $10,000 investment. Thus, GLD performed worse than VCIT by 0.04% annually.


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