State Street Global Advisors has celebrated the fifteenth anniversary of the SPDR Gold Shares (GLD US), the first US-listed ETF backed entirely by physical gold.
The SPDR Gold Shares is backed by physical gold held in London vaults.
Launched on 18 November 2004 on NYSE through a partnership with the World Gold Council, GLD solved an acute investor need for a liquid vehicle to access gold.
It surpassed $1 billion in assets within its first three trading days.
Today, it is the world’s largest and most liquid gold-backed ETF with more than $40bn AUM and approximately $1.7bn in daily trading volume.
The fund’s robust liquidity and relatively low bid-ask spreads are highly valued characteristics, particularly by institutional investors who wish to conduct larger trades while keeping costs low.
Despite competition from rival products, GLD continues to be in demand. It has raked in over $5.5bn of net new inflows year-to-date as investors renew their interest in gold to buffer portfolios against economic concerns, trade tensions, and geopolitical risks.
Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors, commented, “GLD’s launch democratized gold investing by revolutionizing how investors could access gold, bringing greater transparency and liquidity to implementing a gold allocation within portfolios.
“Since launching, investors have relied on GLD to seek to benefit from gold’s historical ability to diversify portfolios and deliver positive returns in periods of US equity market downturns.”
Joe Cavatoni, Managing Director USA, World Gold Council, added, “We are proud to have set the ‘gold-standard’ with GLD. We look forward to continuing to deliver operational excellence for our gold-backed funds while identifying opportunities to drive continued innovation in the gold market to meet evolving investor needs.”
An investment in GLD represents 1/10th of an ounce of gold and its physical holdings are stored as London Good Delivery gold bars (400 oz.) held primarily in London vaults.
As well as New York, the product is available to trade on stock exchanges in Singapore, Tokyo, Hong Kong, and Mexico.
It comes with an expense ratio of 0.40%, which is at the more-expensive end of the fee scale for gold ETFs. Indeed, low-cost gold ETFs in the US – defined as those with expense ratios of 0.20% or less – are becoming increasingly popular, recording positive flows for sixteen of the past seventeen months and growing their collective holdings by 55% so far this year (as of the end of October).
Responding to the demand for lower-cost gold exposure, SSGA and the World Gold Council introduced the SPDR Gold Mini Shares (GLDM US) in June 2018. This fund, which comes with an expense ratio of 0.18% and is listed with a per-share trading price of 1/100th of an ounce of gold, has been well received by investors, surpassing $1bn AUM in September 2019.
Other low-cost gold ETFs include the $570 million GraniteShares Gold Trust (BAR US) and the $1.1bn Aberdeen Standard Physical Gold Shares ETF (SGOL US). Each comes with an expense ratio of 0.17%.