ETF Battles: IAU vs. GLD vs. GDX- A Gilded Cage Match!
Gold has been one of 2025's best ETF trades. Some gold ETFs give you direct exposure to the metal itself. Others give you exposure to gold miners, which are companies digging for it. Their profits rise and fall based on gold prices and, of course, how well they do in terms of their discovery.
Today's audience requested ETF matchup is a faceoff between physical gold and gold miner ETFs. So, who wins the battle, and when is the better choice? Stick around for the answer.
Well, this is ETF Battles, and I'm Ronda Ley, and a warm welcome to all. Hit the like button if you've been enjoying our program, and of course, join our community. For those of you that are new to the program, new to our channel, subscribe. We're almost at 60,000 subscribers, and a big thanks to all of our loyal fans. We could not have done this without you, and this will be our last program for season 6 2025, and we're so glad that you've joined us on this journey.
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So today's ETF contest was recommended and suggested to us by a viewer named Ke 19901. He's a longtime viewer and fan of the program. He also goes by the name Keith. And it's a physical gold versus gold miners matchup. Which strategy is the better play? Well, let's ask our judges. We've got the best in the business, Ethan Ferris with Bloomberg and David Durkin with the street.com. Great to see both of you. Welcome back.
So, we've got our four battle categories: Cost, exposure, strategy, performance, and mystery. For the mystery category, our judges can choose any factor or thing that they feel is crucial to today's contest. They can also opt for split decisions. They can nominate wildcard ETFs. We'll just have to see what they come up with. I've got the scorekeeping chores, and at the end of the program, we will declare an overall winner. Keep in mind none of the battle outcomes on this program are ever predetermined or known in advance by myself or our judges. So, let's kick things off with the first category, cost. Dave, please get us started.
Yeah, I'm definitely going to be throwing out some wild cards in this category. GLD and IAU. GLD comes in at 40 basis points. IAU is at 25 basis points. So, if you're looking at just those two, the EyesShares product is going to be the winner. But I think if you're a retail investor, you definitely want to go with the min shares versions of these funds. So, that would be AUM for EyesShares. It comes in at nine basis points. GLDM from Spider is the mini shares version of that fund. It comes in at 10 basis points. Since they all invest in physical gold, there's really not much reason to not go with the cheapest option in this category. GDX is at 51 basis points. You know, that's a whole different beast that we'll get into in a moment. But as far as just going with the cheapest product here, I'm going to go with AUM is my winner, the mini shares version of the EyesShares Gold ETF.
Thank you, Dave. That's a strong start. Aan, you're up next. How do you see it when it comes to cost?
Well, we're on the same wavelength, Dave, because I was thinking about the other mini versions. So, there's a GLDM and I Mikey had mentioned without breaking those in. Let's just look at what we have here. Obviously, 40 basis points like you mentioned for GLD. This is the default vehicle for everyone. When people think about gold, they just go to GL GLD. That's why it's got 143 billion in assets. IU's got 66 even though it's more expensive. Just sometimes investors just tend to gravitate towards one product or one ticker. GLT's been around for a long time. One I think difference that why not only is it why that is cheaper at 25 basis points so I'm going to give it to IU.
The other thing to keep in mind is the actual price handle of the ETF, meaning you're going to pay $380 or so dollars for GLD and $79 a share for IAU. Sometimes that's important to people if they want more shares, if it's getting put into a model, things like that. So the lower price handle which also the mini products that David had mentioned also alleviate that but just because of the lower expense ratio and the lower handle I think this is easy pick IU
That takes us next to exposure strategy. Aan you're still up give us your analysis.
Great so GLD and IAU are pretty much exactly the same thing if you run performance over the long term they're doing exactly they're giving you exposure to gold spot now if you care about how the gold is being sourced, right? You can one's being they're both being housed in London. One has HSBC as a custodian that's GLD. The other one has JP Morgan. Pretty much the same thing. I think a lot of investors don't necessarily, not that they don't care, they don't get into that level of depth. They're both obviously secured by actual gold in the vaults.
The GDX, which is the Van product, that's a completely different animal. That's gold mining stocks. The only reason I'm going to screen out GDX is I think you have to if you're going to buy be buying gold, a lot of times you want to buy it as a hedge or some sort of uncorrelated assets. When you have GDX and stocks, you're obviously much more correlated to the market. So, this one's basically kind of a tie to be honest cuz they're really doing the same exact thing. They're both giving you really good efficient exposure to gold spot. It's better than the futuresbased product. So, really a tie for me between GLD and IAU.
David, you're up next. Give us your analysis on exposure strategy, please.
Yeah, as Ethan alluded to, this is kind of a, you know, very much an apples to oranges comparison here because with the gold miners, you're looking at stocks. So, you're exposing yourself to operational risk, earnings, revenues, you know, that whole type of thing when it comes to investing in really any kind of stock. So if you look at the historical volatility because of that added risk GDX or really a lot of the gold miners are more than twice as volatile as just physical gold. So that should be a consideration as well.
The gold miners are really just kind of a leveraged play on gold. They're correlated to gold, but there's so many other factors that go into it. It's kind of an entirely separate asset class. So, looking at GDX specifically, I looked at a couple of other similar minor ETFs. I looked at the Sprat Gold Miners ETF, SGDM, and I looked at the EyesShares Global Miners ETF. The ticker symbol is Ring on that one. Very nice.
Within those three, I would still stick with GDX. I tried to get to the other two, but they really have they're really topheavy. Ring in particular has about 40% of the portfolio in just three minor stocks. So it's really it's very concentrated, very topheavy. GDX is a little more spread out at least. So I think as far as the diversification standpoint, I think GDX is better than the other gold miner ETFs. But again, it it's tough to really compare gold to gold miners since they're so different. So I agree with what Aan said. I think most people are trying to use gold as a hedge of some sort. So, I would lean towards the physical gold ETFs. I chose AEUM, the ISShares mini shares version of the gold. I'm going to choose it here again. I AUM is my winner.
That takes us next to performance. And you're still up, David. So, break it down for us. How do these ETFs compare?
Yeah, again, GLD and IAU, the performance is virtually identical. Everything about these is virtually identical outside of the the fee level on that. So, because IU has the lower expense ratio over the long term, that's going to come out a few basis points ahead. So, between those two, there's probably a slight advantage there. If you look at GDX over the last 10 years, it's it's about 50% greater return. If you look at the physical gold ETFs, they've made about 14% a year over the last 10 years. GDX is around 20 to 20% 20 to 21% a year. Most of that obviously has come in the last year or so. But again it gets back to this this point of risk adjusted returns.
You know with the gold miners you would have got a 50% greater return but you're also taking about 150% more risk to get it. So is that worth it? Depends on on what you're looking for. Some people just prefer absolute returns instead of riskadjusted returns. So, they're okay with that. Really, it really depends on what you're looking for. But, this is a case where I I would probably give it a split decision between all three of them because I think as far as physical gold and gold miners, you can really use them both together. You can get physical gold for kind of the the hedge and you can get GDX as sort of the gold correlated outperformance potential, I guess you could say. And that would be potentially give you a little more juice in your returns. And because you're investing in stocks versus gold, there's really there's really a big difference between what you're investing in. So, I guess I'll call it a a split between all three of them just because I
