Spotlight ETF: GLDM, the Low-Cost Gold Fund Leader

Good things come in small packages and the SPDR Gold MiniShares ETF (GLDM) is a prime example in the exchange-traded fund universe. 

While the SPDR Gold Shares (GLD) is the largest and best-known gold ETF, many investors are turning to GLDM as an alternative due to its lower costs and suitability for smaller-scale portfolios. 

Making this week’s ETF spotlight shine brighter, gold’s price, which has jumped 31% in 2024, has been trending toward its best calendar-year gain since 1979, and GLDM’s low expense ratio of 0.10% helps track its benchmark asset tighter than the more expensive gold funds. 

GLDM: When Less Equals More

State Street launched the GLDM ETF in 2018 to offer a more affordable and accessible alternative to GLD, which had become the largest gold ETF in the world and now boasts a massive $78 billion AUM. The goal behind introducing GLDM was to cater to cost-conscious retail investors and those with smaller portfolios who wanted exposure to gold but found the higher expense ratio and share price of GLD less accessible. 

By offering a lower expense ratio (0.10% compared to GLD’s 0.40%) and a smaller share price (today around $54 versus GLD’s $178+), GLDM provides an efficient, low-cost way for individual investors to gain exposure to the price of gold without the higher fees associated with larger ETFs like GLD. This made it appealing for long-term investors looking to hedge against inflation and market volatility while minimizing costs. 

In addition, with gold continuing to be an important asset in portfolio diversification and as a safe haven amid economic and market uncertainty, State Street sought to capture a broader audience and increase its market share in the gold ETF space by introducing a product that would complement its flagship GLD.  

GLDM's launch was also timed to attract a growing base of millennial and self-directed investors who prioritize cost efficiency in their investment strategies. 

GLDM vs. Other Gold ETFs

While there are other gold ETFs in the market, including iShares Gold Trust (IAU) and abrdn Physical Gold Shares ETF (SGOL), GLDM’s combination of lower costs make it a competitive choice. IAU has an expense ratio of 0.25%, which is higher than GLDM, and although SGOL has an attractive cost of 0.17%, its lower liquidity may not appeal to all investors. GLDM’s low expense ratio, simplicity, and strong backing by the SPDR brand provide it with a competitive edge in the gold ETF space. 

Furthermore, GLDM’s low expenses help the fund edge out its competitors in the performance realm. For example, through Oct. 23, GLDM was up 31.56% for the year while IAU and SGOL trailed behind with gains of 31.41% and 31.36%, respectively. GLD was up 31.23% for the year. 

Bottom Line on Investing in GLDM

Investors looking for a cost-effective, accessible way to gain exposure to gold should consider the GLDM ETF. Its low expense ratio, smaller share price, and direct correlation to gold prices make it an attractive alternative to larger ETFs like GLD or competitors like IAU. 

By offering the same core benefits of gold ownership—protection against inflation, currency depreciation, and market uncertainty—GLDM provides an ideal solution for retail and long-term investors focused on minimizing fees while securing the advantages of holding gold in their portfolios.