The SPDR S&P 500 ETF Trust (SPY) and the SPDR Gold Shares (GLD) are both among the Top 100 ETFs. SPY is a SPDR State Street Global Advisors Large Blend fund and GLD is a SPDR State Street Global Advisors N/A fund. So, what’s the difference between SPY and GLD? And which fund is better?
The expense ratio of SPY is 0.31 percentage points lower than GLD’s (0.09% vs. 0.4%). SPY also has a higher exposure to the technology sector and a lower standard deviation. Overall, SPY has provided higher returns than GLD over the past ten years.
In this article, we’ll compare SPY vs. GLD. We’ll look at portfolio growth and performance, as well as at their fund composition and holdings. Moreover, I’ll also discuss SPY’s and GLD’s industry exposure, risk metrics, and annual returns and examine how these affect their overall returns.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
Summary
| SPY | GLD | |
| Name | SPDR S&P 500 ETF Trust | SPDR Gold Shares |
| Category | Large Blend | N/A |
| Issuer | SPDR State Street Global Advisors | SPDR State Street Global Advisors |
| AUM | 374.03B | 59.26B |
| Avg. Return | 14.41% | 5.81% |
| Div. Yield | 1.3% | 0.0% |
| Expense Ratio | 0.09% | 0.4% |
The SPDR S&P 500 ETF Trust (SPY) is a Large Blend fund that is issued by SPDR State Street Global Advisors. It currently has 374.03B total assets under management and has yielded an average annual return of 14.41% over the past 10 years. The fund has a dividend yield of 1.3% with an expense ratio of 0.09%.
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%.
SPY’s dividend yield is 1.30% higher than that of GLD (1.3% vs. 0.0%). Also, SPY yielded on average 8.60% more per year over the past decade (14.41% vs. 5.81%). The expense ratio of SPY is 0.31 percentage points lower than GLD’s (0.09% vs. 0.4%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
Fund Composition
Industry Exposure
| SPY | GLD | |
| Technology | 24.22% | 0.0% |
| Industrials | 8.86% | 0.0% |
| Energy | 2.86% | 0.0% |
| Communication Services | 11.14% | 0.0% |
| Utilities | 2.45% | 0.0% |
| Healthcare | 13.09% | 0.0% |
| Consumer Defensive | 6.32% | 0.0% |
| Real Estate | 2.57% | 0.0% |
| Financial Services | 14.23% | 0.0% |
| Consumer Cyclical | 12.0% | 0.0% |
| Basic Materials | 2.27% | 0.0% |
The SPDR S&P 500 ETF Trust (SPY) has the most exposure to the Technology sector at 24.22%. This is followed by Financial Services and Healthcare at 14.23% and 13.09% respectively. Utilities (2.45%), Real Estate (2.57%), and Energy (2.86%) only make up 7.88% of the fund’s total assets.
SPY’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.0%, and 13.09%.
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%.
SPY is 24.22% more exposed to the Technology sector than GLD (24.22% vs 0.0%). SPY’s exposure to Financial Services and Healthcare stocks is 14.23% higher and 13.09% higher respectively (14.23% vs. 0.0% and 13.09% vs. 0.0%). In total, Utilities, Real Estate, and Energy also make up 7.88% more of the fund’s holdings compared to GLD (7.88% vs. 0.00%).
Holdings
| SPY Holdings | Weight |
| Apple Inc | 5.9% |
| Microsoft Corp | 5.6% |
| Amazon.com Inc | 4.05% |
| Facebook Inc A | 2.29% |
| Alphabet Inc A | 2.02% |
| Alphabet Inc Class C | 1.96% |
| Berkshire Hathaway Inc Class B | 1.45% |
| Tesla Inc | 1.44% |
| NVIDIA Corp | 1.37% |
| JPMorgan Chase & Co | 1.29% |
SPY’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.9%, 5.6%, 4.05%, 2.29%, and 2.02%.
Alphabet Inc Class C (1.96%), Berkshire Hathaway Inc Class B (1.45%), and Tesla Inc (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SPY’s holdings at 1.37% and 1.29%.
| 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%.
Risk Analysis
| SPY | GLD | |
| Mean Return | 1.23 | 0.21 |
| R-squared | 100 | 16.21 |
| Std. Deviation | 13.56 | 16.58 |
| Alpha | -0.09 | 3.91 |
| Beta | 1 | 0.48 |
| Sharpe Ratio | 1.04 | 0.12 |
| Treynor Ratio | 14.12 | 1.21 |
The SPDR S&P 500 ETF Trust (SPY) has a Beta of 1 with a Mean Return of 1.23 and a Standard Deviation of 13.56. Its Alpha is -0.09 while SPY’s R-squared is 100. Furthermore, the fund has a Treynor Ratio of 14.12 and a Sharpe Ratio of 1.04.
The SPDR Gold Shares (GLD) has a Sharpe Ratio of 0.12 with a R-squared of 16.21 and a Alpha of 3.91. Its Treynor Ratio is 1.21 while GLD’s Mean Return is 0.21. Furthermore, the fund has a Beta of 0.48 and a Standard Deviation of 16.58.
SPY’s Mean Return is 1.02 points higher than that of GLD and its R-squared is 83.79 points higher. With a Standard Deviation of 13.56, SPY is slightly less volatile than GLD. The Alpha and Beta of SPY are 4.00 points lower and 0.52 points higher than GLD’s Alpha and Beta.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
Performance
Annual Returns
| Year | SPY | GLD |
| 2020 | 18.25% | 23.68% |
| 2019 | 31.29% | 18.36% |
| 2018 | -4.45% | -1.54% |
| 2017 | 21.69% | 11.41% |
| 2016 | 11.8% | 8.69% |
| 2015 | 1.34% | -11.78% |
| 2014 | 13.53% | -0.58% |
| 2013 | 32.21% | -28.09% |
| 2012 | 15.84% | 5.26% |
| 2011 | 2.06% | 11.2% |
| 2010 | 14.93% | 27.25% |
SPY had its best year in 2013 with an annual return of 32.21%. SPY’s worst year over the past decade yielded -4.45% and occurred in 2018. In most years the SPDR S&P 500 ETF Trust provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.53%, 14.93%, and 15.84% 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
| Fund | Initial Balance | Final Balance | CAGR |
| SPY | $10,000 | $41,712 | 14.41% |
| GLD | $10,000 | $16,395 | 5.81% |
A $10,000 investment in SPY would have resulted in a final balance of $41,712. This is a profit of $31,712 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.41%.
With a $10,000 investment in GLD, the end total would have been $16,395. This equates to a $6,395 profit over 11 years and a compound annual growth rate (CAGR) of 5.81%.
SPY’s CAGR is 8.60 percentage points higher than that of GLD and as a result, would have yielded $25,317 more on a $10,000 investment. Thus, SPY outperformed GLD by 8.60% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
