Gold and Commodity ETF Comparison
Direct answer: Gold ETFs GLD (0.40%) and IAU (0.25%) hold physical gold. iShares Gold Trust Micro (IAUM, 0.09%) is the cheapest physical gold ETF. Broad commodity ETFs like PDBC (0.59%) and DJP (0.85%) track diversified commodity indices. Gold historically stores value during inflationary periods; broad commodity ETFs provide more diversified inflation protection.
Gold and Commodity ETF Comparison
| Ticker | Name | Expense Ratio | What It Holds | AUM (approx) |
|---|---|---|---|---|
| GLD | SPDR Gold Shares | 0.40% | Physical gold | ~$75B |
| IAU | iShares Gold Trust | 0.25% | Physical gold | ~$32B |
| IAUM | iShares Gold Trust Micro | 0.09% | Physical gold | ~$1.5B |
| GLDM | SPDR Gold MiniShares | 0.10% | Physical gold | ~$12B |
| SLV | iShares Silver Trust | 0.50% | Physical silver | ~$12B |
| PDBC | Invesco Optimum Yield Diversified Commodity | 0.59% | Commodity futures (broad) | ~$5B |
| DJP | iPath Bloomberg Commodity Index ETN | 0.70% | Commodity index futures ETN | ~$0.5B |
| USO | United States Oil Fund | 0.73% | WTI crude oil futures | ~$1.5B |
| UNG | United States Natural Gas Fund | 1.06% | Natural gas futures | ~$0.4B |
Source: SPDR: GLD Gold ETF. Last verified: September 2026.
Frequently asked questions
Why is GLD more expensive than IAU or GLDM?
GLD launched first (2004) and established itself as the institutional benchmark for gold exposure. Like SPY vs. VOO, GLD charges a higher fee while offering superior liquidity and the deepest options chain among gold ETFs. Institutional traders, options traders, and hedge funds pay the 0.40% fee for GLD's liquidity. For long-term buy-and-hold investors, IAU (0.25%) or GLDM/IAUM (0.10%) are substantially cheaper. On $100,000 over 20 years, GLD's extra 0.30% annual fee versus IAUM costs approximately $6,000+ compounded at gold's historical return.
Do commodity ETFs actually hedge against inflation?
Commodity ETFs provide inflation hedging in theory (commodity prices often rise with inflation) but are imperfect in practice. Physical gold ETFs are the most reliable inflation hedge for individual investors. Futures-based commodity ETFs (PDBC, DJP, USO) face roll costs: when futures contracts expire, the ETF must roll to the next month's contract, and when futures are in contango (later months more expensive), this creates a persistent drag. PDBC uses an optimum-yield methodology to reduce roll costs. For oil and natural gas specifically (USO, UNG), roll costs can significantly reduce returns even when the underlying commodity rises in price.
What is the difference between a commodity ETF and commodity ETN?
Commodity ETFs hold assets (physical metal or actual futures positions). Commodity ETNs (Exchange-Traded Notes) like DJP are debt instruments issued by a bank (in DJP's case, Barclays). An ETN is a promise to pay you the index return; it holds no physical assets. ETN risks: (1) credit risk of the issuer (if Barclays defaults, DJP holders could lose everything); (2) liquidity risk (ETNs can be called by the issuer or delisted). In normal market conditions, ETNs and ETFs track similarly. The extra credit risk of ETNs is not well-compensated; physical commodity ETFs are generally preferred.