GLD vs IAU

GLDBSPDR Gold Shares

IAUBiShares Gold Trust

In short

GLD Gold in a brokerage account, running since 2004: a trust that holds physical bullion and trades like a stock. It's the heavyweight of the gold shelf, and the fee is the price of that depth.

IAU Gold bars in a London vault, wrapped in a ticker since 2005. IAU is the veteran heavyweight of physical gold funds: bullion held by a custodian bank, priced off the London gold benchmark, tradable all day.

Stated mandate

GLD GLD seeks to have its shares track the price of gold bullion after the Trust’s operating expenses.

IAU The Trust seeks to reflect the price of gold bullion, after accounting for its expenses and liabilities. It provides exposure to physical gold.

Why people hold it

• GLD Does the one job it advertises: shares track the price of gold bullion after the trust's expenses, and the tracking is among the tightest in the gold group.
• Huge and very actively traded, which is why spreads tend to be thin and large orders usually find the other side quickly.
• Plain structure: a grantor trust holding physical gold. No futures, no roll schedule, no leverage between you and the metal.
• Trading since 2004, one of the longest-running gold vehicles on the US market and through several gold cycles.

• IAU A twenty-year paper trail. Launched in 2005, with bullion held by JPMorgan Chase Bank's London branch and two decades of SEC filings anyone can read.sec.gov
• No futures, no swaps, no roll mechanics. Each share is a fractional undivided interest in gold the trust actually holds, marked to the LBMA gold price.sec.gov
• Costs less than the original US gold ETF: 0.25% a year against GLD's 0.40%. It's also one of the most actively traded funds in the physical gold group.
• Simple mandate, cleanly executed: the trust aims to reflect the gold price minus its expenses, and it has tracked that job about as closely as the structure allows.

Worth knowing

• GLD 0.40% a year is the toll for that liquidity: more than double the typical physical-gold ETF fee, and above its own cheaper sibling GLDM at 0.10%.
• No dividends or interest. Bullion pays nothing, so the gold price minus the trust's expenses is the entire story.
• Gold moves in big swings, with no earnings or yield underneath to soften them.

• IAU Fees sit above the cohort median (0.25% vs 0.17%). iShares sells a micro version of the same exposure, IAUM, at 0.09%, and GLDM charges 0.10%.
• The trust earns no income, so it sells gold to pay the sponsor's fee. The gold behind each share declines over time, and shareholders get no distributions.sec.gov
• Tax wrinkle: gains on a trust holding gold are treated as collectibles gains, which can carry a higher top long-term rate than most stock gains.sec.gov

Full GLD profile⁠

Full IAU profile⁠