Forget GLD. The Same Gold Costs 75% Less in This Fund

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Gold has done its job over the past year, and holders of the SPDR Gold Shares (NYSEARCA:GLD) have watched the world’s largest gold ETF climb 25.38% over 12 months. GLD is the default choice for a reason: deep liquidity, tight spreads, and a November 2004 inception that gave it a two-decade head start on every competitor. The trust simply holds physical gold bullion in a vault and prices the shares against the LBMA Gold Price PM. What has changed is that State Street now runs a second physical gold trust that holds the same metal, tracks the same benchmark, and charges a fraction of the fee. For long-term GLD holders, that gap is worth understanding.

What GLD Actually Costs You

GLD’s expense ratio is 0.40% per year, as confirmed in the most recent fact sheet dated March 2026. That fee has not moved in years, and it is paid by selling a sliver of the trust’s gold each month. The mechanism matters: every basis point of expense literally shrinks the ounces of gold backing each share over time. On a $100,000 position, 0.40% is $400 a year, and because the fee compounds against a growing balance during a bull run in gold, the drag accelerates rather than fades.

The Same Gold, A Quarter Of The Fee

The alternative is SPDR Gold MiniShares Trust (NYSEARCA:GLDM), launched by the same sponsor in June 2018 specifically to undercut GLD on cost. GLDM is also a grantor trust that holds allocated physical gold bullion and charges 0.10% per year. That is one-quarter of GLD’s fee, or roughly four times cheaper for the identical underlying exposure.

The return data show the two funds doing exactly what their structures say they should. Over the past year, GLDM returned 25.81% versus GLD’s 25.38%. Over five years, GLDM gained 130%, compared with GLD’s 127%. The roughly 30 basis points of annual outperformance is the fee difference showing up in the price, nothing more exotic than that.

The dollar math on a $100,000 gold allocation: at GLD’s 0.40% fee, fees run about $400 in year one; at GLDM’s 0.10% fee, about $100. Roughly $300 a year saved, before any compounding on the retained balance. Over a decade of holding, the gap widens further as the saved dollars stay invested in gold rather than getting skimmed.

The share price helps small accounts, too. GLD closed at $397.73 on June 16, 2026, while GLDM closed at $85.75. For investors building a position in $500 or $1,000 increments, GLDM’s lower per-share price leaves less idle cash between purchases.

Where GLD Still Earns Its Fee

The argument for sticking with GLD comes down to structure. Its order book is the deepest in the gold ETF category, and its bid-ask spreads are the tightest, which matters for traders moving size or running short-dated options strategies. Institutions building or unwinding multi-million dollar positions in a single session can lose more to slippage in GLDM than they save in expense ratio over a holding period measured in days or weeks. When the position turns over frequently, the liquidity premium tilts toward GLD, reinforcing how trading friction can outweigh headline fees.

Tradeoffs Before You Swap

Tax treatment is identical and worth flagging. Both trusts hold physical bullion, so the IRS taxes long-term gains on bullion as collectibles at a maximum rate of 28%, rather than the 20% rate on equity ETFs. That cuts both ways: switching from GLD to GLDM inside a taxable account is a sale of a collectible, and after gold’s 131.75% five-year run, embedded gains are likely substantial. Inside an IRA or 401(k), the swap is mechanically simple and tax-free. In a taxable account, the 0.30% annual fee saving has to be weighed against the capital gains bill triggered today.

How To Think About The Decision

For buy-and-hold gold exposure in tax-advantaged accounts, GLDM offers the same underlying exposure at a quarter of the expense ratio. For new contributions to a gold sleeve, GLDM captures the fee gap from day one with no tax friction. And for a large existing GLD position in a taxable account, the calculus depends on cost basis: holders sitting on heavy unrealized gains may find that the fee savings take years to outweigh the capital gains bill, while those closer to break-even face a smaller tax hurdle. Active traders tend to prioritize spreads and depth over expense ratios, making GLD’s liquidity advantage most evident.

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The post Forget GLD. The Same Gold Costs 75% Less in This Fund appeared first on 24/7 Wall St..