SPDR Gold Shares (GLD)

Overview:
SPDR Gold Shares (GLD) is the first and largest physically backed gold ETF, sponsored by the World Gold Council. The fund was designed to eliminate the complexities associated with buying, storing, and insuring physical gold bullion, while offering investors direct exposure to spot gold prices as determined by the LBMA Gold Price PM ($/ozt).

Key Metrics:
GLD manages approximately $154.27 billion in assets under management, making it the largest gold ETF globally. Strong investor demand is reflected in $23.09 billion in net inflows over the past year. The fund has 374.40 million shares outstanding, trades at a modest 1.1% premium to NAV, and charges an expense ratio of 0.40%, which is competitive for a physical gold vehicle of its scale and liquidity.

Structure & Strategy:
Structured as a Grantor Trust, GLD employs a physical replication strategy, holding gold bullion in secure vaults. Importantly, the trust structure prohibits lending of the underlying gold, providing an additional layer of investor protection. The fund is passively managed and tracks spot gold prices with minimal tracking error.

Liquidity & Trading:
GLD is one of the most actively traded ETFs globally, offering deep liquidity and tight bid-ask spreads. Its relatively larger NAV per share translates into greater gold exposure per share, which can be advantageous for investors sensitive to per-share trading costs.

Tax Considerations:
For U.S. investors, GLD is treated as a collectible under IRS rules. As a result, long-term capital gains are taxed at a maximum rate of 28%, while short-term gains may be taxed up to 39.6%, making tax efficiency an important consideration in portfolio construction.

Investment Case:
GLD is best suited for investors seeking direct, liquid, and transparent exposure to gold for purposes such as inflation hedging, currency diversification, and risk management. While the tax treatment is less favorable than equity ETFs, GLD’s scale, liquidity, and physical backing make it a core gold exposure vehicle for institutional and long-term investors.