GLDM
SPDR Gold MiniShares Trust
Published by Radif Partners · Updated
Overview
SPDR Gold MiniShares Trust (GLDM) tracks the LBMA Gold Price index and holds its constituents directly, a physical replication managed by SPDR. Dividends are reinvested inside the fund rather than paid out, so GLDM suits investors building a position over time. The fund is domiciled in US, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.10% of assets, and the fund holds 30.7B under management. Over five years the fund returned 18.2% a year on average, against 28.1% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2018-06-25, the fund is denominated in USD and has 8 years of track record. Because GLDM accumulates, nothing is taxed while the shares are held: the charge falls on disposal, against your capital gains allowance in a general account, and not at all inside an ISA or a SIPP. Domicile in US sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
At 0.10%, this fund sits among the cheapest in its category: of 22 comparable funds, only a tenth match it or do better. On £10,000 that is about 10 a year against 35 for the median fund, close to 250 of difference over a decade. Once fees are at the floor, they stop being where the difference lies: it moves to replication quality, read in the tracking difference, and to your broker's dealing cost, which can exceed the fee saving if you buy in small amounts.
Replication is physical: the fund actually holds the constituents of LBMA Gold Price, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.10% headline. That is why two funds at the same price do not track their index with the same fidelity.
The fund is domiciled in the United States, and for a European investor that is the point to settle before any other. A US fund is outside UCITS regulation: most European brokers cannot offer it to a retail client for want of a key information document, so access depends on the investor's status. Two tax consequences follow as well: dividends paid to a non-resident bear US withholding, reduced by treaty where a W-8BEN is in place, and US securities held directly fall within US estate tax above a threshold that is low for a non-resident. An Irish-domiciled equivalent avoids both questions.
Income is accumulated: dividends from the holdings are reinvested inside the fund rather than paid out. In a taxable account that defers taxation to the moment of sale instead of triggering it annually, leaving the whole return at work, and that is the main advantage of this share class. Two qualifications go with it. A holder who needs income has to sell units to obtain it, which is one more decision to take and sometimes at a bad moment. And the deferral is not universal: some countries tax a notional annual return whatever the distribution policy, in which case the accumulating class changes nothing.
With 30.7 billion in assets and 8 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of LBMA Gold Price, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
LBMA Gold Price is a broad index, and that is the building block most portfolios have reason to own before any other, for a simple reason: it requires no forecast. Two points deserve checking before calling it diversified. Cap weighting concentrates the portfolio on the largest companies, so the top ten holdings can make up a substantial share, and that concentration grows without any rule changing. And the geographic scope matters: a developed-world index leaves out emerging markets, while a broad US index is not global exposure despite the international revenue of the companies it holds.
Over one year the fund shows 1.5% against 18.2% annualised over five years: the recent year lags the long average. Before drawing a conclusion, two possible causes have to be separated, because they have different consequences: a fall in the index tracked, which affects every fund replicating it, or a deterioration specific to the fund, which shows in the tracking difference rather than in the return.
0.10%
30.7B
30,708M USDMedium
17
Physical
Accumulating
USD
US
LBMA Gold Price
SPDR
2018-06-25 (8 years)
Contextual Analysis
Fund Size
With 30.7B in assets, this is a large fund, good liquidity and tight spreads.
Fee Positioning
A TER of 0.10% is among the lowest on the market, excellent value.
Track Record
Launched in 2018-06-25, this fund has 8 years of history, enough to evaluate consistency.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | +0.1% |
| 3 Months (est.) | – | +0.4% |
| 6 Months (est.) | – | +0.8% |
| YTD (est.) | – | +0.6% |
| 1 Year | +1.5% | +1.5% |
| 3 Years | +28.1% | +110.1% |
| 5 Years | +18.2% | +131.1% |
| Since inception (8y) | +15.9% | +226.5% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
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About this ETF
The SPDR Gold MiniShares Trust tracks the LBMA Gold Price index. It is managed by SPDR using physical replication and follows a accumulating distribution policy. The fund is denominated in USD and domiciled in US. It has a total expense ratio (TER) of 0.10%.
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Frequently asked questions
What do GLDM's 0.10% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £1.00 a year and roughly £10 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
What should you re-check on GLDM once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of LBMA Gold Price, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
Does GLDM lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and SPDR publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
Can a European investor buy GLDM?
Not always. This fund sits outside the UCITS framework, so most European brokers cannot offer it to a retail client for want of a key information document in their language. Two consequences follow: US withholding tax on dividends, reduced by treaty where a W-8BEN is filed, and US securities falling within US estate tax above a threshold that is low for a non-resident.
Does GLDM pay dividends?
No: the fund accumulates, reinvesting the dividends of the companies it holds so that the unit price rises instead. In a taxable account that defers tax to the sale rather than triggering it annually. Anyone needing regular income has to sell units to obtain it, or choose a distributing class on the same index where one exists.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.