GLD vs. VYM: What’s The Difference?

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

The expense ratio of GLD is 0.34 percentage points higher than VYM’s (0.4% vs. 0.06%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than VYM over the past ten years.

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

Summary

GLD VYM
Name SPDR Gold Shares Vanguard High Dividend Yield Index Fund ETF Shares
Category N/A Large Value
Issuer SPDR State Street Global Advisors Vanguard
AUM 59.26B 48.5B
Avg. Return 5.81% 12.20%
Div. Yield 0.0% 2.79%
Expense Ratio 0.4% 0.06%

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 High Dividend Yield Index Fund ETF Shares (VYM) is a Large Value fund that is issued by Vanguard. It currently has 48.5B total assets under management and has yielded an average annual return of 12.20% over the past 10 years. The fund has a dividend yield of 2.79% with an expense ratio of 0.06%.

GLD’s dividend yield is 2.79% lower than that of VYM (0.0% vs. 2.79%). Also, GLD yielded on average 6.39% less per year over the past decade (5.81% vs. 12.20%). The expense ratio of GLD is 0.34 percentage points higher than VYM’s (0.4% vs. 0.06%).

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Fund Composition

Industry Exposure

GLD vs. VYM - Industry Exposure

GLD VYM
Technology 0.0% 9.77%
Industrials 0.0% 10.14%
Energy 0.0% 7.12%
Communication Services 0.0% 5.91%
Utilities 0.0% 7.27%
Healthcare 0.0% 13.61%
Consumer Defensive 0.0% 14.13%
Real Estate 0.0% 0.02%
Financial Services 0.0% 22.05%
Consumer Cyclical 0.0% 5.57%
Basic Materials 0.0% 4.41%

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 High Dividend Yield Index Fund ETF Shares (VYM) has the most exposure to the Financial Services sector at 22.05%. This is followed by Consumer Defensive and Healthcare at 14.13% and 13.61% respectively. Basic Materials (4.41%), Consumer Cyclical (5.57%), and Communication Services (5.91%) only make up 15.89% of the fund’s total assets.

VYM’s mid-section with moderate exposure is comprised of Energy, Utilities, Technology, Industrials, and Healthcare stocks at 7.12%, 7.27%, 9.77%, 10.14%, and 13.61%.

GLD is 9.77% less exposed to the Technology sector than VYM (0.0% vs 9.77%). GLD’s exposure to Industrials and Energy stocks is 10.14% lower and 7.12% lower respectively (0.0% vs. 10.14% and 0.0% vs. 7.12%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 27.64% less of the fund’s holdings compared to VYM (0.00% vs. 27.64%).

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%.

VYM - Holdings

VYM Holdings Weight
JPMorgan Chase & Co 3.53%
Johnson & Johnson 3.28%
The Home Depot Inc 2.59%
Procter & Gamble Co 2.48%
Bank of America Corp 2.35%
Exxon Mobil Corp 2.02%
Comcast Corp Class A 1.96%
Verizon Communications Inc 1.75%
Intel Corp 1.71%
Cisco Systems Inc 1.69%

VYM’s Top Holdings are JPMorgan Chase & Co, Johnson & Johnson, The Home Depot Inc, Procter & Gamble Co, and Bank of America Corp at 3.53%, 3.28%, 2.59%, 2.48%, and 2.35%.

Exxon Mobil Corp (2.02%), Comcast Corp Class A (1.96%), and Verizon Communications Inc (1.75%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the VYM’s holdings at 1.71% and 1.69%.

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Risk Analysis

GLD VYM
Mean Return 0.21 1.04
R-squared 16.21 88.88
Std. Deviation 16.58 12.69
Alpha 3.91 -0.7
Beta 0.48 0.88
Sharpe Ratio 0.12 0.93
Treynor Ratio 1.21 13.24

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

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has a Beta of 0.88 with a Standard Deviation of 12.69 and a R-squared of 88.88. Its Mean Return is 1.04 while VYM’s Alpha is -0.7. Furthermore, the fund has a Treynor Ratio of 13.24 and a Sharpe Ratio of 0.93.

GLD’s Mean Return is 0.83 points lower than that of VYM and its R-squared is 72.67 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than VYM. The Alpha and Beta of GLD are 4.61 points higher and 0.40 points lower than VYM’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. VYM - Annual Returns

Year GLD VYM
2020 23.68% 1.14%
2019 18.36% 24.2%
2018 -1.54% -5.87%
2017 11.41% 16.42%
2016 8.69% 16.87%
2015 -11.78% 0.33%
2014 -0.58% 13.47%
2013 -28.09% 30.26%
2012 5.26% 12.68%
2011 11.2% 10.5%
2010 27.25% 14.17%

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 VYM, returning 30.26% on an annual basis. The poorest year for VYM in the last ten years was 2018, with a yield of -5.87%. Most years the Vanguard High Dividend Yield Index Fund ETF Shares has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 12.68%, 13.47%, and 14.17% respectively.

Portfolio Growth

GLD vs. VYM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $16,395 5.81%
VYM $10,000 $33,914 12.20%

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 VYM, the end total would have been $33,914. This equates to a $23,914 profit over 11 years and a compound annual growth rate (CAGR) of 12.20%.

GLD’s CAGR is 6.39 percentage points lower than that of VYM and as a result, would have yielded $17,519 less on a $10,000 investment. Thus, GLD performed worse than VYM by 6.39% annually.


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