The SPDR Gold Shares (GLD) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between GLD and VGK? And which fund is better?
The expense ratio of GLD is 0.32 percentage points higher than VGK’s (0.4% vs. 0.08%). GLD also has a lower exposure to the technology sector and a lower standard deviation. Overall, GLD has provided lower returns than VGK over the past ten years.
In this article, we’ll compare GLD vs. VGK. We’ll look at annual returns and performance, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss GLD’s and VGK’s portfolio growth, fund composition, and holdings and examine how these affect their overall returns.
|Name||SPDR Gold Shares||Vanguard FTSE Europe 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 FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
GLD’s dividend yield is 2.52% lower than that of VGK (0.0% vs. 2.52%). Also, GLD yielded on average 0.87% less per year over the past decade (5.81% vs. 6.68%). The expense ratio of GLD is 0.32 percentage points higher than VGK’s (0.4% vs. 0.08%).
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 FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
GLD is 8.30% less exposed to the Technology sector than VGK (0.0% vs 8.3%). GLD’s exposure to Industrials and Energy stocks is 15.58% lower and 4.30% lower respectively (0.0% vs. 15.58% and 0.0% vs. 4.3%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 30.02% less of the fund’s holdings compared to VGK (0.00% vs. 30.02%).
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%.
|ASML Holding NV||2.2%|
|Roche Holding AG||2.13%|
|LVMH Moet Hennessy Louis Vuitton SE||1.58%|
|Novo Nordisk A/S B||1.09%|
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
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 Treynor Ratio of 1.21 with a R-squared of 16.21 and a Mean Return of 0.21. Its Alpha is 3.91 while GLD’s Sharpe Ratio is 0.12. Furthermore, the fund has a Standard Deviation of 16.58 and a Beta of 0.48.
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Beta of 1.06 with a R-squared of 92.76 and a Sharpe Ratio of 0.4. Its Treynor Ratio is 5.12 while VGK’s Mean Return is 0.61. Furthermore, the fund has a Alpha of 0.45 and a Standard Deviation of 16.65.
GLD’s Mean Return is 0.40 points lower than that of VGK and its R-squared is 76.55 points lower. With a Standard Deviation of 16.58, GLD is slightly less volatile than VGK. The Alpha and Beta of GLD are 3.46 points higher and 0.58 points lower than VGK’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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% 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 VGK, the end total would have been $18,350. This equates to a $8,350 profit over 11 years and a compound annual growth rate (CAGR) of 6.68%.
GLD’s CAGR is 0.87 percentage points lower than that of VGK and as a result, would have yielded $1,955 less on a $10,000 investment. Thus, GLD performed worse than VGK by 0.87% 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.