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GLD vs. XLK: What’s The Difference?

The SPDR Gold Shares (GLD) and the Technology Select Sector SPDR Fund (XLK) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and XLK is a SPDR State Street Global Advisors Technology fund. So, what’s the difference between GLD and XLK? And which fund is better?

The expense ratio of GLD is 0.28 percentage points higher than XLK’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 XLK over the past ten years.

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

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Summary

GLDXLK
NameSPDR Gold SharesTechnology Select Sector SPDR Fund
CategoryN/ATechnology
IssuerSPDR State Street Global AdvisorsSPDR State Street Global Advisors
AUM59.26B42.3B
Avg. Return5.81%20.02%
Div. Yield0.0%0.73%
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 Technology Select Sector SPDR Fund (XLK) is a Technology fund that is issued by SPDR State Street Global Advisors. It currently has 42.3B total assets under management and has yielded an average annual return of 20.02% over the past 10 years. The fund has a dividend yield of 0.73% with an expense ratio of 0.12%.

GLD’s dividend yield is 0.73% lower than that of XLK (0.0% vs. 0.73%). Also, GLD yielded on average 14.22% less per year over the past decade (5.81% vs. 20.02%). The expense ratio of GLD is 0.28 percentage points higher than XLK’s (0.4% vs. 0.12%).

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Fund Composition

Industry Exposure

GLD vs. XLK - Industry Exposure

GLDXLK
Technology0.0%87.54%
Industrials0.0%1.75%
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%0.0%
Financial Services0.0%10.71%
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 Technology Select Sector SPDR Fund (XLK) has the most exposure to the Technology sector at 87.54%. This is followed by Financial Services and Industrials at 10.71% and 1.75% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

XLK’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 1.75%.

GLD is 87.54% less exposed to the Technology sector than XLK (0.0% vs 87.54%). GLD’s exposure to Industrials and Energy stocks is 1.75% lower and 0.00% lower respectively (0.0% vs. 1.75% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 10.71% less of the fund’s holdings compared to XLK (0.00% vs. 10.71%).

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%.

XLK - Holdings

XLK HoldingsWeight
Apple Inc21.45%
Microsoft Corp20.37%
NVIDIA Corp4.98%
Visa Inc Class A3.95%
PayPal Holdings Inc3.42%
Mastercard Inc A3.19%
Adobe Inc2.8%
Salesforce.com Inc2.26%
Intel Corp2.26%
Cisco Systems Inc2.23%

XLK’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 21.45%, 20.37%, 4.98%, 3.95%, and 3.42%.

Mastercard Inc A (3.19%), Adobe Inc (2.8%), and Salesforce.com Inc (2.26%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the XLK’s holdings at 2.26% and 2.23%.

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Risk Analysis

GLDXLK
Mean Return0.211.7
R-squared16.2173.56
Std. Deviation16.5815.58
Alpha3.9110.43
Beta0.480.95
Sharpe Ratio0.121.27
Treynor Ratio1.2121.44

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

The Technology Select Sector SPDR Fund (XLK) has a Standard Deviation of 15.58 with a Alpha of 10.43 and a Sharpe Ratio of 1.27. Its Beta is 0.95 while XLK’s Treynor Ratio is 21.44. Furthermore, the fund has a Mean Return of 1.7 and a R-squared of 73.56.

GLD’s Mean Return is 1.49 points lower than that of XLK and its R-squared is 57.35 points lower. With a Standard Deviation of 16.58, GLD is slightly more volatile than XLK. The Alpha and Beta of GLD are 6.52 points lower and 0.47 points lower than XLK’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. XLK - Annual Returns

YearGLDXLK
202023.68%43.67%
201918.36%49.97%
2018-1.54%-1.56%
201711.41%34.27%
20168.69%14.81%
2015-11.78%5.62%
2014-0.58%17.75%
2013-28.09%25.98%
20125.26%15.47%
201111.2%2.69%
201027.25%11.6%

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 XLK, returning 49.97% on an annual basis. The poorest year for XLK in the last ten years was 2018, with a yield of -1.56%. Most years the Technology Select Sector SPDR Fund has given investors modest returns, such as in 2016, 2012, and 2014, when gains were 14.81%, 15.47%, and 17.75% respectively.

Portfolio Growth

GLD vs. XLK - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
GLD$10,000$16,3955.81%
XLK$10,000$67,79020.02%

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 XLK, the end total would have been $67,790. This equates to a $57,790 profit over 11 years and a compound annual growth rate (CAGR) of 20.02%.

GLD’s CAGR is 14.22 percentage points lower than that of XLK and as a result, would have yielded $51,395 less on a $10,000 investment. Thus, GLD performed worse than XLK by 14.22% annually.


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