Greenberg: Which Gold ETF Is Best—the IAU, GLD or SGOL?

Four or five years ago—when gold was still garbage—I decided to buy a gold ETF. For a reason no better than a coin toss, I chose the IAU (iShares Comex Gold Trust) over the GLD (SPDR Gold Trust). The SGOL (ETFS Physical Swiss Gold Shares) didn’t exist.

The GLD was more popular, but all things being equal, the IAU seemed just as good. Gold is gold (assuming it’s really in a vault). Expenses were the same. Plus—I tend always tend to go with underdog. (Track Gold Prices Here.)

But today—would the IAU be the right choice?

Answer: Depends on who you are.

“If you’re a long-term small investor, then it’s the IAU,” says Scott Burns, director of ETF analysis at Morningstar. Several months ago, in an attempt to appeal to small investors and differentiate itself, the IAU did a 10-for-1 stock split.

My take, for years, has been that stock splits are ridiculous because nothing really changes. In this case, it’s 10 pieces of the same pie—purely psychological: One share for $130 or 10 shares for $13?

Institutions, Burns says, are much better off with the GLD simply because it’s more liquid. And at $13 vs. $130, the GLD is cheaper from a transaction standpoint per share.

As for the SGOL : Its expense ratio is slightly below the GLD and IAU and its claim to fame is that its gold is stored in a vault in Switzerland as opposed to New York or London.

My take: If I were buying today, maybe the SGOL would be my pick. But I’m not. All I know is that my IAU went straight up. I started selling in the $90s and kept some for good (or bad!) luck.

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