What Is the Better ETF Investment, the S&P 500 Index or Gold?
Key Points
SPDR Gold Shares provides a low-beta hedge with a 0.20 profile that moves largely independently of the S&P 500 Index.
The State Street SPDR S&P 500 ETF Trust provides a dividend yield of 1.10% while SPDR Gold Shares generates no income.
The SPDR Gold Shares outperformed on a total return basis over the last year with a 50.30% gain compared to 30.30% for the SPDR trust.
- 10 stocks we like better than SPDR Gold Shares ›
Investors could choose the State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) for broad stock market exposure or the SPDR Gold Shares (NYSEMKT:GLD) for a physically-backed commodity hedge.
While SPY tracks the 500 largest publicly-traded American companies, GLD tracks the spot price of gold bullion. This comparison examines how a commodity-focused vehicle differs from the standard equity benchmark in terms of volatility, yield, and long-term capital appreciation.
Snapshot (cost & size)
| Metric | SPY | GLD |
|---|---|---|
| Issuer | SPDR | SPDR |
| Expense ratio | 0.09% | 0.4% |
| 1-yr return (as of 2026-04-14) | 30.3% | 50.3% |
| Dividend yield | 1.1% | None |
| Beta | 1.00 | 0.20 |
| AUM | $651.6 billion | $159.0 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The SPDR trust is significantly more affordable for long-term holders with a 0.09% expense ratio compared to the 0.4% fee for the gold-backed shares.
Performance & risk comparison
| Metric | SPY | GLD |
|---|---|---|
| Max drawdown (5 yr) | -24.5% | -21.0% |
| Growth of $1,000 over 5 years (total return) | $1,788 | $2,692 |
What's inside
The SPDR Gold Shares (NYSEMKT:GLD) focuses entirely on the basic materials sector, as it is designed to track the performance of gold bullion. Launched in 2004, it holds physical gold bars in secure vaults rather than traditional equities. Because it holds a physical commodity, it does not pay a dividend.
In contrast, the State Street S&P 500 ETF Trust (NYSEMKT:SPY) holds 504 positions across all 11 sectors, with top holdings include Nvidia (NASDAQ: NVDA) at 7.78%, Apple (NASDAQ: AAPL) at 6.43%, and Microsoft (NASDAQ: MSFT) at 4.83%. Launched in 1993, the trust is diversified with heavy tilts toward technology at 34% and financial services at 12%. It paid $7.38 per share over the trailing 12 months, reflecting its broad exposure to dividend-paying American corporations.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The SPDR S&P 500 ETF Trust (SPY) and SPDR Gold Shares (GLD) are both operated by State Street. Choosing between these funds depends on the investor’s goals, since they play different roles in an investment portfolio.
GLD offers exposure to gold bullion, a useful tool for hedging against the risk of losses from factors such as economic uncertainty, high inflation, or currency devaluation. Since the ETF owns gold, it delivers high liquidity and a safe haven from market downturns. However, GLD’s expense ratio of 0.4% is not cheap.
SPY grants exposure to U.S. large-cap stocks, and is a good foundation for an investment portfolio. It pays a dividend, providing passive income, while also sporting a significantly lower expense ratio of 0.09%. The downside is that it’s experienced lower returns than GLD of late. However, SPY is a solid choice for long-term wealth accumulation, as the S&P 500 has historically delivered growth over the long haul.
Of course, you can choose to invest in both, giving you the benefits of U.S. equities along with a hedge during volatile, inflationary economic periods.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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