Gold ETFs Compared: GLD vs IAU vs GLDM vs IAUM

Diane Whitfield

Dealer specialist; 22 years running a coin shop, focused on buying gold and vetting dealers.

Published Jun 2026 · Last reviewed Jun 18, 2026

Four funds dominate the physically backed gold ETF market, and on the surface they all do the same thing: hold gold and issue shares you trade like a stock. The differences that matter are cost, liquidity, and what you give up by owning paper instead of metal. This page compares them factually so you can match a fund to how you actually plan to use it.

What these ETFs have in common

GLD, IAU, GLDM, and IAUM are all physically backed gold ETFs. Each holds allocated gold bars in a vault, and each share represents a fractional claim on that metal. The gold price moves all four the same way — minus the annual fee. So the choice between them is not “which tracks gold best?” They all track gold. The choice is about what you pay to hold the fund and how easily you can trade it.

A second thing they share is structure: they’re grantor trusts that hold metal, not metal you can take home. That has two consequences worth stating up front — counterparty and structure risk, and a tax treatment that surprises people. Both are covered below, because they apply to every fund on this page.

The four major funds, side by side

Here’s how the main physically backed gold ETFs stack up. The figures are approximate and change over time — treat them as directional and confirm the current numbers before you buy.

Expense ratio is the lever for long-term holders

The expense ratio is the annual fee the fund skims, expressed as a percentage of your holding. It’s small in any single year, but it compounds, and over a long hold the gap between funds adds up. On a $25,000 position, GLD’s ~0.40% is roughly $100 a year; IAUM’s ~0.09% is closer to $22. Same gold, same price moves — about $78 a year of difference, every year, for owning the cheaper wrapper.

This is why the “mini” and “micro” funds exist. State Street launched GLDM and BlackRock launched IAUM specifically as low-cost, buy-and-hold alternatives to their flagship products. They hold the same kind of metal; they just charge less to do it. For someone parking a gold allocation for years, the lower expense ratio is usually the deciding factor — there’s no good reason to pay four times the fee for metal you intend to sit on.

Liquidity and options favor the bigger funds

So why does anyone still buy GLD at four times the fee? Liquidity and the options market. GLD is the oldest and largest gold ETF, which means the tightest bid-ask spreads, the deepest trading volume, and an active, liquid options chain. IAU is close behind on liquidity at a lower fee.

For a trader moving large size, or anyone who wants to write covered calls or buy puts against a gold position, that depth matters more than a tenth of a percent in fees. GLDM and IAUM are perfectly liquid for ordinary investing, but they don’t have the same options ecosystem. The rule of thumb: if you’re trading gold or using options, the extra liquidity of GLD or IAU can be worth the higher expense ratio; if you’re holding gold, it usually isn’t.

Closed-end and redeemable options

The four ETFs above aren’t the only paper-gold structures. The Sprott Physical Gold Trust (PHYS) is a closed-end fund rather than an open-ended ETF. It holds allocated gold and, unlike most ETFs, offers a physical redemption feature — but in practice that’s only realistic for very large holders, because redemption typically requires a minimum equal to a full London Good Delivery bar (roughly 400 ounces) plus fees and logistics. For an ordinary investor, “redeemable” does not mean you can swap your shares for a coin at the post office.

Closed-end funds also trade at a premium or discount to the value of the gold they hold, which the open-ended ETFs largely avoid. None of this makes PHYS better or worse — it’s a different tool. But if you bought it expecting easy physical delivery, the fine print will disappoint you. The honest takeaway: if your real goal is metal in hand, don’t reach for it through a fund at all.

The two caveats that apply to every gold ETF

Paper is not metal

Every fund here gives you exposure to the gold price, not gold you can hold. You own shares in a trust that owns the metal, which means a sponsor, a custodian, and a vault all have to keep operating correctly. For large, established funds that risk is low — but it isn’t zero, and it’s a fundamentally different kind of risk than a coin in your own safe. If your reason for wanting gold is to hold an asset outside the financial system, an ETF puts that system right back in the middle. We walk through that trade-off in detail in physical gold vs. a gold ETF.

The tax surprise: collectibles, not stocks

This catches people off guard. The IRS treats most physically backed gold ETFs as collectibles — the same category as a coin or bar — so long-term gains can be taxed at a rate up to 28%, higher than the 0%–20% that applies to ordinary stocks. Buying gold through an ETF does not generally buy you out of the collectibles rate. If you’re choosing an ETF partly because you assume it’s taxed like a normal equity fund, check that assumption first in our guide to how gold and silver are taxed.

When physical beats an ETF — and when it doesn’t

An ETF wins when you want cheap, liquid, hands-off exposure inside a portfolio: easy to rebalance, easy to dollar-cost average, nothing to store or insure. Physical wins when control is the point — gold you hold with no counterparty, that doesn’t depend on a fund staying solvent or a custodian doing its job. The catch is that physical carries dealer premiums of roughly 3%–8% on coins, plus storage and a wider buy/sell spread.

Notably, the tax treatment is mostly a wash: both physical metal and most physically backed ETFs are taxed as collectibles. So taxes aren’t the deciding factor between them — cost, liquidity, and whether you want the metal in hand are. Many investors who want gold simply own both: a physical core they control, plus a low-fee ETF position for the easy, tradable slice. For the fuller breakdown, see physical vs. ETF and the How to Buy Gold hub. Silver buyers face the same choice — our physical silver vs. silver ETFs guide covers the wrinkles specific to silver.

How to actually choose

Strip away the noise and it comes down to a short decision:

• Long-term holder, no options: pick the lowest expense ratio — GLDM (~0.10%) or IAUM (~0.09%). Over years, the fee savings are the whole game.
• Active trader or options user: pick GLD for maximum liquidity and the deepest options market, or IAU for strong liquidity at a lower fee.
• You want metal you can hold: skip the ETF entirely and buy physical from a vetted dealer — see how to vet a gold dealer.

Whatever you choose, remember that gold of any form is still gold: most advisors suggest capping precious metals at roughly 5%–10% of a portfolio. The fund you pick decides how cheaply and easily you hold that slice — not how big it should be.

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