IAU vs GLD: Comparing costs, performance, and liquidity of gold ETFs

iShares Gold Trust (IAU) and SPDR Gold Shares (GLD) are both designed to track the price of physical gold, giving investors a straightforward way to gain gold exposure without holding bullion. The key differences between the two funds are their expense ratios, scale, and trading liquidity, while performance and risk characteristics remain closely aligned.

Cost, size and trading characteristics

A snapshot of the two heavyweight gold ETFs highlights the main structural differences for investors comparing ongoing costs and fund scale:

• Expense ratio: IAU at 0.25% versus GLD at 0.4%.
• 1-year return (as of 4/3/26): IAU 50.07% versus GLD 49.92%.
• Beta: both funds at 0.67 (beta calculated from five-year monthly returns).
• Assets under management (AUM): IAU $71.4 billion versus GLD $156.7 billion.

With neither fund paying a dividend, yield is not a factor in this comparison. IAU’s lower expense ratio makes it more cost-effective for long-term holding, while GLD’s larger size and liquidity may appeal to investors who prioritize ease of trading.

Performance and risk comparison

Over longer periods, the funds’ drawdowns and cumulative growth remain similar, reflecting their shared goal of tracking gold prices:

• Max drawdown (5 years): IAU -21.82% versus GLD -21.03%.
• Growth of $1,000 over 5 years: IAU $2,671 versus GLD $2,651.

Beta measures price volatility relative to the S&P 500, and the 1-year return figures represent total return over the trailing 12 months.

Fund structure: what investors are buying

Both ETFs are backed by physical gold bullion and are intended to provide “pure” gold price exposure.

• GLD: described as the largest and most liquid gold ETF globally, with over $155 billion in assets under management and a track record spanning more than 21 years. Its holdings consist entirely of gold.
• IAU: also fully backed by physical gold and tracks the price of gold, but is smaller in fund size and charges a lower expense ratio.

Implications for investors

Because both IAU and GLD track the price of gold, their performance is tied to the metal’s broader trend. Gold has increased more than 170% over the last five years, and it is often used as a safe-haven alternative investment that may help hedge against inflation and volatile market conditions while diversifying a portfolio.

The slight differences in overall growth and returns are attributed primarily to fees. GLD’s higher expense ratio means investors pay a larger ongoing cost to hold the fund, which can gradually reduce returns over time—an effect that matters most for long-term investors.

With betas below 1, both ETFs are described as less volatile than the broader market. The article also notes that holding shares in a brokerage account can be more convenient than storing physical gold bars, though some investors may prefer holding assets outside the traditional banking structure.