Choosing Between Gold ETFs? Why Trusting the Process with GLDM vs IAU Delivers Results

When building a long-term investment portfolio, trusting the process means making informed decisions based on concrete data rather than market noise. For gold investors evaluating ETF options, this approach applies perfectly—comparing GLDM and IAU reveals clear patterns in costs, performance, and risk that guide your choice.

Both SPDR Gold MiniShares Trust (GLDM) and iShares Gold Trust (IAU) provide straightforward exposure to gold prices without the storage complications of physical bullion. However, they differ meaningfully in expense structure and historical volatility. Understanding these differences helps you align your gold allocation with your financial priorities.

Cost Efficiency: Where GLDM Pulls Ahead

The most immediately visible distinction between these funds lies in their expense ratios. GLDM charges just 0.10% annually, while IAU’s fee sits at 0.25%—a 150% cost differential that compounds over years of holding.

For a $100,000 investment held for 10 years, this difference translates to $1,500 in additional expenses with IAU. While individual basis points may seem trivial, the drag accumulates significantly across decades. Neither fund distributes dividends, so expense ratio becomes the primary cost consideration for investors.

This cost advantage makes GLDM particularly attractive for budget-conscious investors who trust the process of letting index-tracking funds operate efficiently over extended periods. Lower fees directly translate to higher take-home returns without requiring active management or market timing.

Performance and Risk: Five Years of Historical Evidence

Over the trailing 12 months measured as of January 9, 2026, both funds delivered similar returns—IAU posted 67.2% while GLDM achieved 66.2%. The one-point difference proved immaterial, confirming both track gold’s price movements effectively.

More revealing is the five-year maximum drawdown data. Surprisingly, both funds experienced identical maximum declines of 20.92%, suggesting they face similar downside risks during volatile periods. However, when examining cumulative growth, GLDM’s $2,427 return on a $1,000 investment slightly exceeded IAU’s $2,414 outcome—a modest advantage reflecting the compounding benefit of lower costs.

Beta values for both funds register at 0.09, indicating minimal correlation with stock market movements. This characteristic confirms their role as diversification tools rather than equity-tracking vehicles.

Understanding the Fund Structure: What’s Inside Each ETF

Both GLDM and IAU maintain identical structural approaches: they hold physical gold bullion and track its spot price with minimal variation. Neither fund contains equities, sector tilts, or alternative assets. Their holdings align perfectly to gold’s market value, delivering pure commodity exposure.

GLDM, operating for 7.5 years, has established itself as a reliable alternative to IAU’s longer track record. The distinction stems not from design sophistication—both employ straightforward spot-price tracking—but from operational efficiency and cost management. Neither fund contains hidden complexities or unusual holdings; investors receive exactly what they intend: gold price exposure.

Liquidity and Asset Base: Considering AUM Differences

IAU commands significantly larger assets under management at approximately $72.9 billion compared to GLDM’s $28.0 billion. This size advantage traditionally signals enhanced liquidity and tighter bid-ask spreads for IAU traders.

However, both figures represent substantial pools where investors can enter and exit positions without meaningful price impact. Even GLDM’s $28 billion AUM provides sufficient depth for most retail and institutional traders. The liquidity argument favors IAU only for traders executing extremely large positions requiring maximum market depth.

Making Your Gold Investment Decision

For most investors building diversified portfolios, including gold proves prudent given its historical role as an inflation hedge and portfolio stabilizer. ETFs simplify gold exposure by eliminating storage risks while replicating physical bullion’s price appreciation.

Between these two vehicles, GLDM emerges as the optimal choice for the majority of investors. Its 0.10% expense ratio saves money systematically over decades, matching IAU’s performance while reducing your cost burden. The identical maximum drawdown means accepting no additional risk for this savings.

Trust the process: let lower expenses work in your favor through compound returns over years and decades. Unless you specifically require IAU’s larger AUM for executing massive institutional trades, GLDM delivers equivalent gold exposure at meaningfully lower cost. For cost-conscious and risk-aware investors committed to long-term gold holdings, GLDM represents the data-driven choice.