It is a trust-structured physical gold ETF sponsored by State Street (SSGA) and the World Gold Council. It holds London gold bullion in physical custody and uses a passive strategy to track the gold price one-to-one.

It suits asset allocators who want inflation hedging and safe-haven exposure, as well as traders who take advantage of its deep liquidity and options market.

It is a passively managed (index-tracking) ETF run by SPDR (State Street).

It is a passively managed ETF designed so that the trust holds standard London gold bullion in physical custody and the ETF share price tracks the gold price one-to-one. Because it pays no distributions and generates only capital gains, its tax treatment works differently from that of a typical ETF.

• Deep liquidity and an active options market
• One-to-one exposure to physical gold
• The benchmark asset among gold ETFs

Assets under management (AUM) stand at $129.5B, and the total expense ratio is 0.40% per year.

IAU, GLDM, SGOL and IAUM shown in the table are all classified as physical gold ETFs, and the main differences are expense ratio, sponsor and price per share. GLD leads in liquidity and options market depth, while GLDM and IAUM are cheaper direct substitutes on cost.

It has tended to show strength during periods of a weaker dollar, interest rate cuts and heightened geopolitical risk, while a stronger dollar and rate hike cycles can bring short-term pullbacks.

It belongs to the group of mega-cap commodity ETFs where safe-haven demand meets inflation-hedging demand. Inflows have at times been especially notable during periods of heightened geopolitical risk and central bank gold buying cycles.

Deep liquidity and one-to-one exposure to physical gold are its main strengths, while the lack of distributions, tax treatment and expense ratio differences are drawbacks to consider in advance.

IAU, GLDM, IAUM and SGOL shown in the table are substitutes offering the same physical gold exposure, and the main differences are expense ratio and price per share. SLV is a physical silver ETF in the same SSGA and iShares lineups, so its underlying asset is different. To add exposure to gold mining company stocks, you can also consider GDX and GDXJ, and for broad commodity exposure, variants such as DBC and PDBC.

Here are the points to review before investing in GLD. Physical gold exposure and deep liquidity are strengths, but it is advisable to double-check the lack of distributions, tax treatment and expense ratio differences before buying, and to review your position size and diversification strategy at the same time.

A stronger dollar, rising interest rates, tax treatment and exchange rate fluctuations are the main drivers of short-term volatility and real returns. Because there are no distributions and no cash flow during the holding period, this should be considered when deciding your asset allocation weight.

As a core asset with one-to-one exposure to physical gold, it is regarded as a standard choice. If expense ratio is the priority for long-term holding, GLDM, IAUM and SGOL are suitable variants. For exposure to gold mining stocks, GDX fits, and for broad commodity exposure, DBC.