Choosing Between GLD and GLDM: Why Lower Fees Matter More Than You Think

The Cost Question That Could Save You Thousands

When it comes to gold ETF investing, two names dominate the conversation: SPDR Gold Shares (GLD) and SPDR Gold MiniShares Trust (GLDM). On the surface, they look nearly identical—both track physical gold bullion with precision. But dig deeper, and GLDM’s 0.10% expense ratio dramatically undercuts GLD’s 0.40% annual fee. That 0.30% difference might sound trivial, but over decades of investing, it compounds into real money.

Here’s the tension: GLD commands $151.5 billion in assets, making it the heavyweight champion of gold ETFs. GLDM, despite being the newer player at $26.4 billion in AUM, has been quietly outperforming its older sibling. Over five years, GLDM returned 145.8% compared to GLD’s 142.5%—a gap primarily attributable to that cheaper expense ratio eating away less of your gains.

Performance: Nearly Identical Twins

Both funds posted remarkably similar one-year returns as of January 2026:

• GLD: 67.0% one-year return
• GLDM: 66.2% one-year return

On a compound annual growth rate (CAGR) basis over five years, the story remains consistent:

• GLD: 19.4% CAGR
• GLDM: 19.7% CAGR

Maximum drawdowns over the same five-year period? Virtually identical at -21.03% for GLD and -20.92% for GLDM. This tells investors something important: when it comes to tracking gold’s actual price movements, these funds deliver the goods. Neither uses leverage, derivatives, or complex overlays—just pure gold exposure.

Size and Liquidity: Does It Really Matter?

This is where investors often get confused. Yes, GLD’s $151.5 billion in assets dwarfs GLDM’s $26.4 billion. But here’s the catch: GLDM still possesses ample liquidity. With over $26 billion under management, trading shares in and out of GLDM is smooth and efficient. Unless you’re moving institutional-sized positions, the liquidity difference is negligible.

The real question becomes: why pay more for the same product? For cost-conscious investors who aren’t trading massive volumes, GLDM emerges as the superior choice.

Why Gold (and How to Own It)

Before deciding between these two, understand why gold deserves a place in your portfolio. Financial advisors traditionally recommend a 5-10% gold allocation as an inflation hedge. Gold has historically served this role during periods of rising prices and currency devaluation.

You have three paths to gold exposure:

1. Physical bullion: Store it yourself (inconvenient, but direct)
2. Gold ETFs: Easy to buy, sell, and hold through a broker
3. Other metals: While platinum is sometimes cheaper than gold on a per-ounce basis, it lacks gold’s universal acceptance as a store of value

Gold ETFs win for most investors because they eliminate storage hassles while maintaining full liquidity. You can convert shares to cash instantly—try that with bars hidden in a safe.

The Verdict for Your Portfolio

If you’re building a diversified portfolio and want gold exposure, this decision boils down to one factor: cost efficiency. GLDM’s 0.10% expense ratio versus GLD’s 0.40% creates a meaningful advantage over 10, 20, or 30-year investment horizons. The five-year performance data proves GLDM’s slightly superior returns aren’t luck—they’re the mathematical result of lower fees.

GLD’s dominance makes sense for institutional buyers prioritizing maximum liquidity. But for individual investors seeking a cheaper gold ETF with virtually identical performance characteristics, GLDM represents the smarter choice. Both track gold bullion faithfully, both avoid leverage and gimmicks, but only one won’t silently drain your returns through unnecessary fees.

Key Metrics at a Glance