The SPDR Gold Trust (GLD) fund is easily the most well recognized and established gold ETF. It was established in 2004, making it the oldest of the gold ETFs available in the market today. It is designed to track the performance of spot gold prices with some variance due to fees and other costs of storing, handling and insuring physical gold bullion.
With $73 billion in assets under management, the SPDR Gold Trust GLD ETF is by far the largest of the gold ETFs traded on US exchanges today. As previously alluded to, the SPDR Gold Trust invests in physical gold bullion - 100% of assets under management. As a result, the share price of GLD varies with the moment to moment spot price of gold - although in fairness the price of GLD is always a bit behind the spot due to the management fees, etc. the ETF charges for asset management that would normally be borne by the investor were they to take physical delivery of spot gold. Each share of GLD represents the equivalent of 0.1 Oz of physical gold - so a price quote of GLD would be approximately 1/10th the price of spot gold at any given time.
Like effectively all ETFs in the gold and precious metals space in 2011 performance was strong throughout most of the year until the very end. In a similar manner to the previously reviewed Powershares Gold ETF, fully half of the YTD gains through November 2011 were given back by years end. Even so the SPDR Gold Trust ETF gained approximately 9.6% in 2011, soundly beating the major equity indexes.
The SPDR Gold Trust ETF has a slightly higher expense ratio than its nearest analog - the iShares Gold Trust ETF - but only slightly. This may be attributable to the fact that GLD has fully seven times as many assets under management as the iShares ETF. Given the ETF has only seven years of operating history to date long term performance analysis is severely limited. On the other hand the ease of investing in gold via ETFs has made them extremely popular both in the US and overseas (just look at the many gold ETF in India). Gold ETFs are certainly here to stay and the SPDR Gold ETF (GLD) is the largest of these popular commodities ETFs.