The SPDR Gold Shares (GLD) and the Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and VCSH is a Vanguard Short-Term Bond fund. So, what’s the difference between GLD and VCSH? And which fund is better?
The expense ratio of GLD is 0.35 percentage points higher than VCSH’s (0.4% vs. 0.05%). GLD also has a high exposure to the technology sector while VCSH is mostly comprised of BBB bonds. Overall, GLD has provided higher returns than VCSH over the past ten years.
In this article, we’ll compare GLD vs. VCSH. We’ll look at holdings and fund composition, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss GLD’s and VCSH’s risk metrics, annual returns, and performance and examine how these affect their overall returns.
|NameSPDR Gold SharesVanguard Short-Term Corporate Bond 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 Short-Term Corporate Bond Index Fund ETF Shares (VCSH) is a Short-Term Bond fund that is issued by Vanguard. It currently has 47.88B total assets under management and has yielded an average annual return of 3.12% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.05%.
GLD’s dividend yield is 1.89% lower than that of VCSH (0.0% vs. 1.89%). Also, GLD yielded on average 2.69% more per year over the past decade (5.81% vs. 3.12%). The expense ratio of GLD is 0.35 percentage points higher than VCSH’s (0.4% vs. 0.05%).
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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%.
|VCSH Bond Sectors||Weight|
VCSH’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 47.49%, 43.06%, 8.45%, 0.95%, and 0.03%. The fund is less weighted towards Others (0.02%), B (0.0%), and BB (0.0%) rated bonds.
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The SPDR Gold Shares (GLD) has a Standard Deviation of 16.58 with a R-squared of 16.21 and a Treynor Ratio of 1.21. Its Mean Return is 0.21 while GLD’s Alpha is 3.91. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Beta of 0.48.
The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) has a Mean Return of 0.24 with a R-squared of 37.53 and a Treynor Ratio of 4.75. Its Beta is 0.48 while VCSH’s Sharpe Ratio is 0.97. Furthermore, the fund has a Standard Deviation of 2.34 and a Alpha of 0.93.
GLD’s Mean Return is 0.03 points lower than that of VCSH and its R-squared is 21.32 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than VCSH. The Alpha and Beta of GLD are 2.98 points higher and 0.00 points lower than VCSH’s Alpha and Beta.
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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 VCSH, returning 6.85% on an annual basis. The poorest year for VCSH in the last ten years was 2018, with a yield of 0.91%. Most years the Vanguard Short-Term Corporate Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2016, and 2011, when gains were 2.45%, 2.63%, and 2.94% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VCSH, the end total would have been $13,569. This equates to a $3,569 profit over 10 years and a compound annual growth rate (CAGR) of 3.12%.
GLD’s CAGR is 2.69 percentage points higher than that of VCSH and as a result, would have yielded $685 less on a $10,000 investment. Thus, GLD outperformed VCSH by 2.69% annually.
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