Choosing Between GLD and GLDM: Which Gold ETF Actually Saves You Money?

The Cost Dilemma: Why Expense Ratio Matters More Than You Think

When investors consider gold ETF vs physical gold exposure, they often overlook one critical factor—the annual fees that silently eat into returns. SPDR Gold Shares (GLD) charges 0.40% yearly, while SPDR Gold MiniShares Trust (GLDM) undercuts it at just 0.10%. On a $10,000 investment, that’s a $30 difference annually—small on paper, but over decades, this compounds significantly.

Both funds track physical gold bullion directly, eliminating storage headaches that come with holding actual bars. Yet the fee gap reveals something crucial: not all gold ETF options are created equal. For cost-conscious investors asking gold etf vs physical gold comparisons, these two SPDR products offer a practical middle ground.

Performance: Nearly Identical Returns, But One Outpaces the Other

Over the past five years, the performance data tells a surprisingly close story. GLDM returned 145.8% with a 19.7% compound annual growth rate, while GLD posted 142.5% and 19.4% CAGR respectively. The difference? That lower expense ratio compounds advantage over time, even when tracking the same underlying asset.

Maximum drawdowns reveal similar risk profiles: GLDM experienced a -20.92% peak-to-trough decline versus GLD’s -21.03%. A $1,000 investment in each fund over five years would grow to approximately $2,427 and $2,396 respectively—proof that gold exposure through cheaper funds genuinely matters.

Both achieved a one-year return of roughly 66-67% as of early 2026, demonstrating their tight tracking accuracy.

Size Matters, But Liquidity Isn’t the Real Issue

GLD dominates with $151.5 billion in assets under management, making it the largest gold-backed ETF globally. GLDM, at $26.4 billion AUM, remains substantially smaller—yet this isn’t the disadvantage it appears.

With $26+ billion already deployed, GLDM offers more than adequate liquidity for most retail investors. The size difference serves institutional traders and high-volume buyers better, but individual investors won’t notice any trading friction with either product. Both trade seamlessly on exchanges with tight bid-ask spreads.

Beyond Cost: The Structural Similarities

Neither fund employs leverage, derivatives, or ESG overlays—both provide pure gold bullion exposure. No dividends are distributed, keeping the focus entirely on price appreciation. The portfolio structures mirror gold’s movements almost perfectly, with both achieving near-zero beta (0.09) relative to broader equity markets.

This purity is intentional. Gold’s historical role as an inflation hedge depends on its independence from stock market volatility. Whether you hold GLD or GLDM, that uncorrelated protection remains intact.

The Real Question: Gold ETF vs Physical Gold Storage

For most investors, the choice between gold ETF holdings and physical bars comes down to convenience. Storing physical gold bullion requires vaults, insurance, and constant security concerns. ETFs eliminate these friction points entirely.

Financial advisors typically recommend 5-10% portfolio allocation to gold across diversified holdings. Gold ETF structures like GLD and GLDM make that allocation effortless—simply buy shares through any broker, hold them in your account, and enjoy instant liquidity. Converting shares to cash takes minutes, whereas liquidating physical bars involves finding buyers and arranging transfers.

The Verdict: Why GLDM Edges Out GLD for Most Investors

If raw gold exposure is your goal, GLDM delivers the same performance with a four-fold lower expense ratio. Five-year track records show marginally better returns, and the $26.4 billion AUM provides sufficient depth for comfortable trading.

GLD remains the safer choice if you prioritize maximum liquidity or institutional-grade infrastructure, but that premium doesn’t justify the 0.30% annual fee difference for typical portfolios. When evaluating gold etf vs physical gold, remember that even the cheapest ETF beats physical storage on convenience alone—and GLDM undercuts both by being the most cost-effective gold ETF available today.