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GLD vs. VNQ: What’s The Difference?

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

The expense ratio of GLD is 0.28 percentage points higher than VNQ’s (0.4% vs. 0.12%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than VNQ over the past ten years.

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

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Summary

GLDVNQ
NameSPDR Gold SharesVanguard Real Estate Index Fund ETF Shares
CategoryN/AReal Estate
IssuerSPDR State Street Global AdvisorsVanguard
AUM59.26B77.34B
Avg. Return5.81%11.05%
Div. Yield0.0%2.34%
Expense Ratio0.4%0.12%

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 Real Estate Index Fund ETF Shares (VNQ) is a Real Estate fund that is issued by Vanguard. It currently has 77.34B total assets under management and has yielded an average annual return of 11.05% over the past 10 years. The fund has a dividend yield of 2.34% with an expense ratio of 0.12%.

GLD’s dividend yield is 2.34% lower than that of VNQ (0.0% vs. 2.34%). Also, GLD yielded on average 5.24% less per year over the past decade (5.81% vs. 11.05%). The expense ratio of GLD is 0.28 percentage points higher than VNQ’s (0.4% vs. 0.12%).

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Fund Composition

Industry Exposure

GLD vs. VNQ - Industry Exposure

GLDVNQ
Technology0.0%0.0%
Industrials0.0%0.0%
Energy0.0%0.0%
Communication Services0.0%0.0%
Utilities0.0%0.0%
Healthcare0.0%0.0%
Consumer Defensive0.0%0.0%
Real Estate0.0%100.0%
Financial Services0.0%0.0%
Consumer Cyclical0.0%0.0%
Basic Materials0.0%0.0%

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 Real Estate Index Fund ETF Shares (VNQ) has the most exposure to the Real Estate sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

VNQ’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

GLD is 0.00% less exposed to the Technology sector than VNQ (0.0% vs 0.0%). GLD’s exposure to Industrials and Energy stocks is 0.00% lower and 0.00% lower respectively (0.0% vs. 0.0% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 100.00% less of the fund’s holdings compared to VNQ (0.00% vs. 100.00%).

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%.

VNQ - Holdings

VNQ HoldingsWeight
Vanguard Real Estate II Index11.62%
American Tower Corp7.24%
Prologis Inc5.33%
Crown Castle International Corp5.01%
Equinix Inc4.3%
Public Storage2.85%
Simon Property Group Inc2.52%
Digital Realty Trust Inc2.49%
SBA Communications Corp2.1%
Welltower Inc2.09%

VNQ’s Top Holdings are Vanguard Real Estate II Index, American Tower Corp, Prologis Inc, Crown Castle International Corp, and Equinix Inc at 11.62%, 7.24%, 5.33%, 5.01%, and 4.3%.

Public Storage (2.85%), Simon Property Group Inc (2.52%), and Digital Realty Trust Inc (2.49%) have a slightly smaller but still significant weight. SBA Communications Corp and Welltower Inc are also represented in the VNQ’s holdings at 2.1% and 2.09%.

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Risk Analysis

GLDVNQ
Mean Return0.210.89
R-squared16.2144.4
Std. Deviation16.5816.13
Alpha3.912.47
Beta0.480.76
Sharpe Ratio0.120.62
Treynor Ratio1.2111.9

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

The Vanguard Real Estate Index Fund ETF Shares (VNQ) has a Alpha of 2.47 with a Sharpe Ratio of 0.62 and a R-squared of 44.4. Its Beta is 0.76 while VNQ’s Treynor Ratio is 11.9. Furthermore, the fund has a Mean Return of 0.89 and a Standard Deviation of 16.13.

GLD’s Mean Return is 0.68 points lower than that of VNQ and its R-squared is 28.19 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than VNQ. The Alpha and Beta of GLD are 1.44 points higher and 0.28 points lower than VNQ’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. VNQ - Annual Returns

YearGLDVNQ
202023.68%-4.72%
201918.36%28.91%
2018-1.54%-5.95%
201711.41%4.95%
20168.69%8.53%
2015-11.78%2.37%
2014-0.58%30.29%
2013-28.09%2.42%
20125.26%17.67%
201111.2%8.62%
201027.25%28.44%

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 2014 was the strongest year for VNQ, returning 30.29% on an annual basis. The poorest year for VNQ in the last ten years was 2018, with a yield of -5.95%. Most years the Vanguard Real Estate Index Fund ETF Shares has given investors modest returns, such as in 2017, 2016, and 2011, when gains were 4.95%, 8.53%, and 8.62% respectively.

Portfolio Growth

GLD vs. VNQ - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
GLD$10,000$16,3955.81%
VNQ$10,000$29,50611.05%

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 VNQ, the end total would have been $29,506. This equates to a $19,506 profit over 11 years and a compound annual growth rate (CAGR) of 11.05%.

GLD’s CAGR is 5.24 percentage points lower than that of VNQ and as a result, would have yielded $13,111 less on a $10,000 investment. Thus, GLD performed worse than VNQ by 5.24% annually.


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