Low-fee gold ETFs take 15% share as mini funds expand

Low-cost gold exchange-traded funds are capturing an expanding share of investor capital as retail savers and wealth advisors seek to minimize holding fees.

Why it matters: Standard physically backed gold funds charge between 0.25% and 0.40% annually in sponsor fees. Mini products charging 0.09% to 0.15% allow long-term investors to retain a greater portion of bullion returns over multi-year holding periods.

Across the ten largest US physically backed gold ETFs, total assets under management stand at $255.4bn. The two largest mini-share products, SPDR Gold MiniShares (GLDM) with $31.3bn and iShares Gold Trust Micro (IAUM) with $8.0bn, now command a combined $39.3bn, holding 15.4% of total US gold ETF assets on our data.

This expansion reflects a structural shift in investor behavior since the products were introduced. While legacy mega-funds continue to dominate short-term institutional trading due to superior options liquidity, long-term allocators have systematically redirected regular investment flows into low-expense alternatives.

How do US gold ETFs compare on fees and scale?

The table below ranks the ten largest US physically backed gold ETFs by assets under management based on latest fund registry data:

Flagship fund SPDR Gold Shares (GLD) remains the clear market leader with $145.2bn in assets, representing 56.9% of the group total. However, that represents a steady decrease from five years ago when GLD controlled more than 70% of the physical ETF universe.

Why does fee migration matter for gold investors?

For retail investors purchasing gold to hold in tax-advantaged retirement accounts, fee differences accumulate significantly over time. On a $100,000 position held over ten years, an expense ratio of 0.40% consumes approximately $4,000 in direct management charges, assuming zero price change. A mini fund charging 0.10% consumes roughly $1,000 over the same decade.

Registered investment advisors subject to fiduciary standards are increasingly bound to place clients in the lowest-cost share class available. This trend was prominent during third-quarter inflows, where low-cost funds accounted for over 40% of net retail inflows despite representing a smaller total asset base, as documented in our review of how gold ETFs took in a record $31bn in Q3.

Institutional market makers and hedge funds continue to prioritize GLD because its secondary options market provides tighter bid-ask spreads for multi-million dollar hedging transactions. Yet as mini funds cross $30bn in scale, their trading liquidity has reached levels sufficient for all but the largest sovereign accounts, reinforcing the steady rotation tracked by our gold ETF flows tracker.