IAU - GLD: 3 Things Less Talked About

2024-07-16 01:18:14 ET

Summary

• GLD ETF is often criticized for its lack of current income, with no dividends or active income.
• Dividends (or the lack of) are irrelevant in my view.
• The key is of a good investment is a resource that becomes scarcer relative to the money base.
• And historically, gold and SP500 have been doing an equally good job by this standard.
• Although, tax and fees can cause GLD's performance to deviate from the ideal case more than large equity funds.

GLD ETF: lack of current income

I last wrote on the SPDR Gold Shares ETF ( GLD ) about 3 months ago (to be exact, it was published on Seeking Alpha on April 8, 2024). As you can see from the screenshot below, the title of the article, I Expect More Upside Potential For Gold , already gave away my thesis. In the article, I explained why I see more upside potential for GLD for the following considerations:

GLD has more upside potential, with its price finally breaking out of a multi-year consolidation. The top catalysts include elevated inflation, central bank demand, and gold's expanding industry use. Despite recent rallies, GLD prices are still about the same as ~12 years ago. A quick calculation would show that its price appreciation in the past 12 years does not even keep pace with inflation.

For further details see: