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IEMG vs. GLD: What’s The Difference?

The iShares Core MSCI Emerging Markets ETF (IEMG) and the SPDR Gold Shares (GLD) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and GLD is a SPDR State Street Global Advisors N/A fund. So, what’s the difference between IEMG and GLD? And which fund is better?

The expense ratio of IEMG is 0.29 percentage points lower than GLD’s (0.11% vs. 0.4%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided higher returns than GLD over the past ten years.

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

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Summary

IEMGGLD
NameiShares Core MSCI Emerging Markets ETFSPDR Gold Shares
CategoryDiversified Emerging MktsN/A
IssueriSharesSPDR State Street Global Advisors
AUM83.68B59.26B
Avg. Return7.41%5.81%
Div. Yield1.78%0.0%
Expense Ratio0.11%0.4%

The iShares Core MSCI Emerging Markets ETF (IEMG) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 83.68B total assets under management and has yielded an average annual return of 7.41% over the past 10 years. The fund has a dividend yield of 1.78% with an expense ratio of 0.11%.

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%.

IEMG’s dividend yield is 1.78% higher than that of GLD (1.78% vs. 0.0%). Also, IEMG yielded on average 1.60% more per year over the past decade (7.41% vs. 5.81%). The expense ratio of IEMG is 0.29 percentage points lower than GLD’s (0.11% vs. 0.4%).

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Fund Composition

Industry Exposure

IEMG vs. GLD - Industry Exposure

IEMGGLD
Technology20.44%0.0%
Industrials5.92%0.0%
Energy4.71%0.0%
Communication Services11.41%0.0%
Utilities2.13%0.0%
Healthcare5.73%0.0%
Consumer Defensive5.68%0.0%
Real Estate2.75%0.0%
Financial Services16.9%0.0%
Consumer Cyclical15.67%0.0%
Basic Materials8.64%0.0%

The iShares Core MSCI Emerging Markets ETF (IEMG) has the most exposure to the Technology sector at 20.44%. This is followed by Financial Services and Consumer Cyclical at 16.9% and 15.67% respectively. Real Estate (2.75%), Energy (4.71%), and Consumer Defensive (5.68%) only make up 13.14% of the fund’s total assets.

IEMG’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.73%, 5.92%, 8.64%, 11.41%, and 15.67%.

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%.

IEMG is 20.44% more exposed to the Technology sector than GLD (20.44% vs 0.0%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 16.90% higher and 15.67% higher respectively (16.9% vs. 0.0% and 15.67% vs. 0.0%). In total, Real Estate, Energy, and Consumer Defensive also make up 13.14% more of the fund’s holdings compared to GLD (13.14% vs. 0.00%).

Holdings

IEMG - Holdings

IEMG HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd5.37%
Tencent Holdings Ltd4.42%
Alibaba Group Holding Ltd Ordinary Shares4.38%
Samsung Electronics Co Ltd3.49%
Meituan1.52%
Naspers Ltd Class N0.93%
Vale SA0.91%
Reliance Industries Ltd Shs Dematerialised0.83%
China Construction Bank Corp Class H0.77%
Infosys Ltd0.74%

IEMG’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Samsung Electronics Co Ltd, and Meituan at 5.37%, 4.42%, 4.38%, 3.49%, and 1.52%.

Naspers Ltd Class N (0.93%), Vale SA (0.91%), and Reliance Industries Ltd Shs Dematerialised (0.83%) have a slightly smaller but still significant weight. China Construction Bank Corp Class H and Infosys Ltd are also represented in the IEMG’s holdings at 0.77% and 0.74%.

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%.

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Risk Analysis

IEMGGLD
Mean Return00.21
R-squared016.21
Std. Deviation016.58
Alpha03.91
Beta00.48
Sharpe Ratio00.12
Treynor Ratio01.21

The iShares Core MSCI Emerging Markets ETF (IEMG) has a Beta of 0 with a Sharpe Ratio of 0 and a Treynor Ratio of 0. Its Mean Return is 0 while IEMG’s Standard Deviation is 0. Furthermore, the fund has a Alpha of 0 and a R-squared of 0.

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

IEMG’s Mean Return is 0.21 points lower than that of GLD and its R-squared is 16.21 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than GLD. The Alpha and Beta of IEMG are 3.91 points lower and 0.48 points lower than GLD’s Alpha and Beta.

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Performance

Annual Returns

IEMG vs. GLD - Annual Returns

YearIEMGGLD
202018.18%23.68%
201917.5%18.36%
2018-14.69%-1.54%
201736.78%11.41%
20169.98%8.69%
2015-13.86%-11.78%
2014-2.04%-0.58%
2013-2.16%-28.09%
20120.0%5.26%
20110.0%11.2%
20100.0%27.25%

IEMG had its best year in 2017 with an annual return of 36.78%. IEMG’s worst year over the past decade yielded -14.69% and occurred in 2018. In most years the iShares Core MSCI Emerging Markets ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.

The year 2010 was the strongest year for GLD, returning 27.25% on an annual basis. The poorest year for GLD in the last ten years was 2013, with a yield of -28.09%. Most years the SPDR Gold Shares has given investors modest returns, such as in 2012, 2016, and 2011, when gains were 5.26%, 8.69%, and 11.2% respectively.

Portfolio Growth

IEMG vs. GLD - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IEMG$10,000$15,0377.41%
GLD$10,000$15,3085.81%

A $10,000 investment in IEMG would have resulted in a final balance of $15,037. This is a profit of $5,037 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.41%.

With a $10,000 investment in GLD, the end total would have been $15,308. This equates to a $5,308 profit over 7 years and a compound annual growth rate (CAGR) of 5.81%.

IEMG’s CAGR is 1.60 percentage points higher than that of GLD and as a result, would have yielded $271 less on a $10,000 investment. Thus, IEMG outperformed GLD by 1.60% annually.


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