GLD vs. VHT: What’s The Difference?

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

The expense ratio of GLD is 0.30 percentage points higher than VHT’s (0.4% vs. 0.1%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than VHT over the past ten years.

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

Summary

GLD VHT
Name SPDR Gold Shares Vanguard Health Care Index Fund ETF Shares
Category N/A Health
Issuer SPDR State Street Global Advisors Vanguard
AUM 59.26B 17.94B
Avg. Return 5.81% 16.04%
Div. Yield 0.0% 1.15%
Expense Ratio 0.4% 0.1%

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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.

GLD’s dividend yield is 1.15% lower than that of VHT (0.0% vs. 1.15%). Also, GLD yielded on average 10.23% less per year over the past decade (5.81% vs. 16.04%). The expense ratio of GLD is 0.30 percentage points higher than VHT’s (0.4% vs. 0.1%).

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Fund Composition

Industry Exposure

GLD vs. VHT - Industry Exposure

GLD VHT
Technology 0.0% 0.05%
Industrials 0.0% 0.05%
Energy 0.0% 0.0%
Communication Services 0.0% 0.0%
Utilities 0.0% 0.0%
Healthcare 0.0% 99.57%
Consumer Defensive 0.0% 0.0%
Real Estate 0.0% 0.0%
Financial Services 0.0% 0.02%
Consumer Cyclical 0.0% 0.0%
Basic Materials 0.0% 0.31%

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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.

VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.

GLD is 0.05% less exposed to the Technology sector than VHT (0.0% vs 0.05%). GLD’s exposure to Industrials and Energy stocks is 0.05% lower and 0.00% lower respectively (0.0% vs. 0.05% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.02% less of the fund’s holdings compared to VHT (0.00% vs. 0.02%).

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%.

VHT - Holdings

VHT Holdings Weight
Johnson & Johnson 7.34%
UnitedHealth Group Inc 6.44%
Pfizer Inc 3.7%
Abbott Laboratories 3.48%
Thermo Fisher Scientific Inc 3.37%
AbbVie Inc 3.37%
Merck & Co Inc 3.33%
Eli Lilly and Co 3.17%
Danaher Corp 2.91%
Medtronic PLC 2.83%

VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.

AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.

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Risk Analysis

GLD VHT
Mean Return 0.21 1.33
R-squared 16.21 59.86
Std. Deviation 16.58 13.58
Alpha 3.91 7.99
Beta 0.48 0.75
Sharpe Ratio 0.12 1.13
Treynor Ratio 1.21 20.74

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

The Vanguard Health Care Index Fund ETF Shares (VHT) has a R-squared of 59.86 with a Alpha of 7.99 and a Mean Return of 1.33. Its Treynor Ratio is 20.74 while VHT’s Beta is 0.75. Furthermore, the fund has a Sharpe Ratio of 1.13 and a Standard Deviation of 13.58.

GLD’s Mean Return is 1.12 points lower than that of VHT and its R-squared is 43.65 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than VHT. The Alpha and Beta of GLD are 4.08 points lower and 0.27 points lower than VHT’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. VHT - Annual Returns

Year GLD VHT
2020 23.68% 18.21%
2019 18.36% 21.97%
2018 -1.54% 5.55%
2017 11.41% 23.34%
2016 8.69% -3.33%
2015 -11.78% 7.22%
2014 -0.58% 25.38%
2013 -28.09% 42.67%
2012 5.26% 19.1%
2011 11.2% 10.57%
2010 27.25% 5.75%

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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.

Portfolio Growth

GLD vs. VHT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $16,395 5.81%
VHT $10,000 $48,464 16.04%

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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.

GLD’s CAGR is 10.23 percentage points lower than that of VHT and as a result, would have yielded $32,069 less on a $10,000 investment. Thus, GLD performed worse than VHT by 10.23% annually.


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