Wealthy PotGLDM vs IAU: The Low-Cost Gold ETF Showdown
If you have already decided to hold gold for the long run through an ETF, you have probably come across GLDM and IAU, two low-cost physical gold trusts from State Street and BlackRock. Both hold gold bullion in vaults and value it at the LBMA Gold Price PM. The difference comes down to cost: GLDM charges 0.10% a year; IAU's sponsor fee is 0.25%.
The Short Answer
- Same metal, same valuation: physical gold, priced off the LBMA Gold Price PM.
- GLDM is cheaper: 0.10% against 0.25%, or $10 against $25 a year on $10,000.
- Different sponsors: GLDM is a State Street SPDR trust; IAU is BlackRock's iShares.
- Either works for a long-term gold position; GLDM costs less.
GLDM vs IAU Side by Side
| Feature | GLDM | IAU |
|---|---|---|
| Full name | SPDR Gold MiniShares Trust | iShares Gold Trust |
| Annual fee | 0.10% | 0.25% (sponsor fee) |
| Holds | Physical gold | Physical gold |
| Benchmark / valuation | LBMA Gold Price PM | LBMA Gold Price (NAV at the PM price) |
| Launched | June 25, 2018 | January 21, 2005 |
The Fee Is the Decision
With the same metal valued the same way, the fee is what separates your results. Gold trusts pay their fees by selling a little gold, so the gold behind each share declines over time; iShares states this for IAU, and the same mechanism applies to any physical trust. As a hypothetical illustration ignoring gold price changes, over 20 years IAU's 0.25% fee would consume about 4.9% of a position and GLDM's 0.10% about 2.0%.
IAU is the older fund, launched in 2005, and many investors bought it years before GLDM existed. If that is you and the shares sit in a taxable account with a gain, the tax on selling (below) can easily cost more than years of the extra 0.15 points, so staying put is often the better call.
Same Tax Treatment
Owning shares of a physical gold trust is treated for U.S. tax purposes like owning gold, and the IRS taxes long-term gains on collectibles at a maximum 28%, higher than the 20% top rate on most long-term capital gains. The iShares Gold Trust prospectus confirms this for IAU; GLDM is also a physical gold trust, and the same treatment generally applies. It does not favour either fund, but it is a reason many investors keep gold in a retirement account.
Which One Fits You
- Choose GLDM for a new long-term gold position at the lower fee of the two.
- Keep IAU if you already own it at a gain in a taxable account.
- Do not hold both. They own the same metal.
Trading gold actively or using options? See GLD vs GLDM.
FAQ
Is GLDM cheaper than IAU?
Yes. GLDM charges 0.10% a year; IAU's sponsor fee is 0.25%.
Do GLDM and IAU hold the same gold?
Both hold physical gold bullion and value it using the LBMA Gold Price PM.
Which is older?
IAU, launched January 21, 2005. GLDM launched June 25, 2018.
How are gold ETFs taxed?
Generally as collectibles, with long-term gains taxed at up to 28% federally.
Should I switch from IAU to GLDM?
In a retirement account there is no tax cost. In a taxable account, selling at a gain usually costs more than the fee difference saves.
This article is for general information and is not investment or tax advice. Fund figures were taken from State Street's and iShares' published fund pages on 2026-09-23 and can change; the fee illustration is hypothetical. Confirm current figures before you invest.