2 Surprising Ways GLD Is Losing To IAU

| About: SPDR Gold (GLD)


GLD, the SPDR Gold Trust, finished the first half of 2012 through the end of June with a gain. Just shy of 3% for the year, the 2.96% move forward was hard earned after being in double digit gain territory at the start of 2012 and then actually going negative in the early part of the summer. Here's the GLD performance grid snapshot from GoldETFs.biz as of the end of June of 2012.

gld etf, spdr gold trustThe SPDR Gold Trust year to date performance through the end of June 2012. Source: GoldETFs.biz

Despite GLD being the largest and most popular physical gold ETF in the world, it still finished behind several other gold ETFs in performance. Its chief competitor, the iShares Gold Trust (NYSEARCA:IAU), led all gold ETFs in performance with a gain of over 3%. Even the Swiss Gold ETF (NYSEARCA:SGOL) edged out GLD in performance. While both of these ETFs are priced lower than the SPDR, SGOL has just a one basis point advantage compared to the 15 basis point advantage IAU has. The SPDR Gold Trust is currently priced at a peer group high of 40 basis points.

GLD continues to remain strong from an asset level perspective, even though it has seen some redemption activity due to gold's lackluster performance. Here's its asset level as of the end of June from GoldETFs.biz.

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The bigger threat to the SPDR Gold Trust is the rising market share of IAU when it comes to new inflows. Year to date through the end of July, IAU has captured more than 3.5 times the investor inflows of GLD. This is amazing considering that the asset base of GLD is about 7 times larger than IAU. Here's the inflow report from Index Universe on GLD and IAU.

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GLD is getting thumped by IAU in terms of inflows and performance in 2012.

Clearly the SPDR Gold Trust is currently on a downward spiral versus the iShares Gold Trust. It trails in performance and inflows to IAU due to its legacy pricing and perceived asset size advantage. For investors in GLD, the recent performance and inflow stats are troubling but perhaps they may also awaken the ETF to use its scale to price more competitively. If not, performance and investors in the SPDR Gold Trust will continue to be lost.

To conclude, here's the freshly update performance grid comparing both leading physical gold ETFs over seven different time periods via GoldETFs.biz. It does not favor GLD one bit and one wonders if the market is just beginning to figure that out.

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IAU has been dominant in performance over GLD. August 3, 2012 data

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: Christian Magoon publishes GoldETFs.biz.