09/19/2025 Gold Continues to Outshine Equities

This fact may surprise quite a few investors. During the period
from January 1, 2000, through August 31, 2025, gold bullion
delivered significantly higher returns than the S&P 500. Throw
in last week where the S&P 500 Index rose 0.3% compared to
4% for GLD, the most-traded gold ETF, and gold’s
outperformance widens further. However, if dividends are
taken into account and assumed to be reinvested as happens
automatically for purchasers of S&P 500 ETF SPY, then the margin of outperformance
is cut from more than 4% for the year to approximately 2.55%.

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Key performance metrics (Jan 1, 2000–Aug 31, 2025)

Metric Gold S&P 500 S&P 500
Bullion Index Index
(Price) (Tot.
Return*)
Beginning of $272.65 $1,425.59 $75.84
period price

End of $3,447.95 $6,460.26 $645.05

period price

Percentage 1164.60% 353.20% 603.08%

gain
Annualized 10.39% 6.06% 7.92%
Return

The expectations of market strategists and pension consultants were quite different
heading into 2000. Many were arguing against the traditional allocation of 5% to 10% to
gold and/or other commodities. One widely followed consultant wrote that gold is a
dying asset that will always have a flat-to-negative return over long periods of time.
Perhaps 25 years is not long enough. Let’s take a quick look at what has changed to
lead to a global increase of gold relative to fiat currencies not seen since the 1930s.
Gold showed strong performance during market downturns, including the dot-com
bubble and the 2008 financial crisis. This has provided updated evidence that its value
as a portfolio diversifier was not a thing of the past.
Let's break this down decade by decade. From 2000 through 2009: Gold proved its
mettle during a difficult decade for equities. This period included the dot-com crash,
post-9/11 global stability fears and the 2008 financial crisis, causing three significant
bear markets for the S&P 500. Gold enjoyed a strong rally, beginning the decade at
around $270 and closing near $1,087 per ounce. In contrast, investors in SPY, the first
S&P 500 ETF, experienced a "lost decade," with an annualized return of -9.78%.
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During the next decade, things started changing after the first two years as
post-financial-crisis confidence began to reinforce investor and consumer confidence in
governmental stability. In 2010 and 2011, gold still prevailed. Although SPY rebounded
nicely in both years, GLD had even higher returns both times. That was it for GLD for
the decade, however, as it underperformed SPY during 7 of the next eight years during
an exceptional bull market for stocks. The exception was 2018 when both ETFs were
down but GLD was down less. From 2013 through 2015, investors began using their
gold allocations as sources of funds to buy stocks. Consequently, GLD plummeted
more than 40%. Positive returns in 2016, 2017 and 2019, although not keeping up with
SPY, allowed GLD to finish the decade a shade into positive territory. Moreover, at the
end of 2019, bullion was still outperforming the S&P 500 price index for the century. .
The current decade beginning with the Covid-19 Pandemic has been highly profitable
for holders of both SPY and GLD. 2020, many will recall that SPY took as much as a
40% plunge in the month of March followed by an even sharper rebound for the rest of
the year. At the same time, the pandemic did quite a lot to shake faith for many people
in global stability and GLD climbed 25% compared with the 18% gain for SPY. In 2021,
with the nation optimistic that the pandemic was being controlled, GLD was used as a
source of funds for stocks, slipping 4% while SPY gained 21%. In 2022, the spike in
inflation was killing consumer confidence and didn’t help the stock market either,
spurring a reversal with an 18% loss by SPY while GLD lost 0.8%. The war in Ukraine
was another possible factor in the erosion of confidence among global investors. Both
GLD and SPY have posted double-digit gains in the past twenty months with gold taking
off even higher since June of 2024. We think it may not be coincidental that during the
same period the dollar has weakened considerably with respect to the Euro. There
appears to be a dichotomy where US equity investors believe corporate profits in
leadership companies will continue to accelerate; they continue to pour money into
these and other index stocks. However, fund flows from Europe and a number of other
countries into US-dollar denominated assets has significantly decreased and with these
moves, the dollar continues to decline.
The reason for this long recap of why the price of gold has defied experts’ expectations
is to set the stage for where we are now. The point is not that gold and US stocks are
inversely correlated as many believe. In fact, that is definitely not true. Certainly, the
performance we have seen in the past 25 years is not about gold as a commodity. The
commodity indices have not done very well in many of the years that gold thrived. The
latter group did very well when there were concerns about inflation but gold’s pricing
behavior indicates that it is the asset of choice when global investors (gold being a
global asset) are concerned about the current and future stability of major governments
and the ability of major global economies to dig themselves out of holds. Gold prospers
when investors have long-term stability concerns even if they still see opportunities in
the global stock markets. For US denominated assets, the price of gold also tends to
rise when the US dollar makes a major move downward. The disinvesting trend of
major global investors in US-denominated assets has not abated. To us, this questions
the conventional wisdom that gold has had too much of a run and is too overpriced to
be a prudent investment now. In fact, using the major gold mining stocks as a proxy, it
may be too early to stop adding to positions in gold relative to US equities.
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At ValuEngine, we currently cover 38 gold mining stocks that are listed on major
exchanges. This industry is dominated by relatively small companies. Only 8 have a
market capitalization of greater than $10 billion while 13 stocks with a market
capitalization between $1 and $9.9 billion. Focusing on the top eight market cap stocks,
three are rated 5 (Strong Buy), four are rated 4 (Buy) and the final stock, Kinross Corp
(KGC) is rated 3 (Hold). It is quite unusual for our predictive model for any industry to
have 87.5% of all its stocks greater than $10 billion in market capitalization rated as buy
or better.
The 5-rated stocks are the following:​
​
Agnico Eagle Mines (AEM) is a gold producer with mining operations in Canada,
Mexico and Finland, and exploration activities in Canada, Europe, Latin America and
the United States. Agnico Eagle operates through two broader segments. Northern
Business include the LaRonde and Goldex mines and Canadian Malartic mine, all
based in Quebec, as well as the Meadowbank and Meliadine mines in Nunavut and the
Kittila mine in Lapland in northern Finland. Southern Business consists of the Pinos
Altos mine and Creston Mascota satellite mine, both in Chihuahua in northern Mexico
as well as the La India mine in Sonora in northern Mexico. The company was founded
in 1972 and headquartered in Toronto, Ontario, Canada.
Barrick Mining Corporation (B) is a leading global gold and copper producer, focusing
on developing and operating long-life, Tier One assets in prolific mining regions across
the Americas, Africa, the Middle East, and Asia. Barrick Mining Corporation was
founded in 1983 and is based in Toronto, Canada.
Alamos Gold Corporation (AGI) is a Canadian-based intermediate-sized gold producer
with diversified production from three operating mines in North America. This includes
the Young-Davidson mine in northern Ontario, Canada and the Mulatos and El Chanate
mines in Sonora State, Mexico. It was founded in 2003 with headquarters in Toronto.
This table compares all eight companies’ stocks with more than $10 billion market cap.
Market 1 -Yr. Earning
Company Last Cap ($ VE P/E Price s
Ticker Name Close Bil.) Rating Ratio Change Growth
AGNICO
AEM EAGLE 152.82 76.8 5 25.0 94% 9%
ALAMOS
AGI GOLD INC 33.12 13.9 5 33.3 77% 82%
BARRICK
B MINING 29.48 50.3 5 16.7 50% 36%
ANGLOGOLD
AU ASHNT 64.6 27.1 4 16.7 135% -2%
FRANCO NV
FNV CP 198.73 38.3 4 50.0 64% 21%
NEWMONT
NEM CORP 78.43 86.2 4 14.3 53% -8%
ROYAL GOLD
RGLD INC 186.18 12.3 4 25.0 37% 12%
KINROSS
KGC GOLD 22.94 28.0 3 20.0 154% -4%

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Of the three profiled stocks rated Strong Buy, all three have positive earnings growth
with Alamos Gold (AGI) placing highest followed by Barrick Gold (B). The latter has a
more reasonable P/E ratio at 16.7, just more than half that of the SPDR S&P 500 Index
ETF (SPY). Barrick also has the second lowest 1-year price change, indicating that
there is still room to run in terms of potential price gains relative to its peers. Market cap
leader Newmont Corp, in contrast, has the lowest P/E ratio but negative earnings
growth. It is still rated a buy. But at this time B merits further consideration and research
given its overall competitiveness in all four categories.
However, investing in just one or a handful of gold mining stocks, even industry leaders
such as Barrick and Agnico, can be more risky than investing with an ETF that holds
these stocks along with many other gold mining stocks. ETFdb.com, the VettaFi ETF
database, is our source for data on gold mining ETFs and gold bullion exchange-traded
vehicles (ETVs). There are 9 non-leveraged ETFs included in the database. Most of
them are rather small so we limited this analysis to the five largest.
About these ETFs –
Van Eck Global Gold Miners ETF (GDX) - Tracks the overall performance of the largest
and most liquid companies involved in the global gold mining industry. It is by far the
largest and oldest of the gold mining ETFs and is well-diversified with 63 holdings.
Van Eck Junior Gold Miners ETF (GDXJ) - Provides exposure to smaller-capitalization
companies involved in gold and silver mining. Because junior miners are smaller,
earlier-stage companies, they often have a greater sensitivity to gold price movements,
which means greater potential upside, but also higher volatility and risk compared to
larger, more established companies.
SPDR S&P Metals & Mining ETF (XME) - Although XME includes the major gold stocks,
it also represents the broader U.S. metals and mining industry, including companies in
the steel, coal, and copper sub-industries. It uses a modified equal-weighting
methodology. It has the lowest expense ratio of this group and is the only one to pay
quarterly, not annual, dividends. On the other hand, it also holds the fewest stocks, has
the lowest dividend yield and the lowest correlation to the price of gold.
iShares MSCI Global Gold Miners ETF (RING) - Invests in a global index of companies
primarily engaged in the business of gold mining. It has a lower expense ratio and
higher returns across the board to its most direct competitor, GDX.
Sprott Gold Miners ETF (SGDM) - Targets larger-sized gold companies, specifically
those with stocks listed on Canadian and major U.S. exchanges. It uses a "smart-beta"
approach, with a rules-based methodology that emphasizes companies with strong
revenue growth, free cash flow yield, and low debt-to-equity. In recent periods, the
strategy has not outperformed the other major ETFs in this category.
 Symbol GDX GDXJ XME RING SGDM SPLG

VanEck SPDR
VanEck Junior S&P iShares
Gold Gold Metals & MSCI SPDR S&P
Miners Miners Mining Global Gold Sprott Gold 500 Index
Name ETF ETF ETF Miners ETF Miners ETF ETF
Assets
($ Bil.) 19.6 7.0 2.3 2.0 0.5 86.5
1 Month
Returns 24.3% 28.9% 12.6% 25.6% 21.4% 2.3%
YTD
Price
Change 92.3% 96.0% 44.1% 99.6% 97.4% 12.9%
3 Year
Returns 42.0% 43.8% 20.9% 47.7% 39.8% 18.7%
5 Year
Returns 10.8% 8.8% 27.9% 11.9% 10.1% 16.2%
Div.
Yield % 0.6% 1.4% 0.4% 0.8% 0.5% 1.1%
Exp.
Ratio 0.51% 0.51% 0.35% 0.39% 0.50% 0.02%
# of
Holding
s 63 84 30 43 39 500

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This chart compares the data for these five mining company ETFs. SPDR S&P 500
Index ETF (SPLG) is included for benchmarking purposes. As most of the underlying
companies tend to go up and down with the price of gold, albeit not every day, these
ETFs tend to outperform when gold is outperforming stocks. All five have substantially
outperformed SPLG for the 1-month, year-to-date and three-year periods. The S&P
500 Index outperformed 4 of the 5 ETFs but underperformed XME. As mentioned,
XME holds stocks of precious metal mining companies in addition to industrial metals
miners. Accordingly, it will not track the price of gold as closely as the other four ETFs
that have “gold” rather than “metals & mining." 2021 saw a post-pandemic sell-off in
gold, explaining why the gold miners' ETFs underperformed XME for the five-year
period. The demand for industrial metals rose in 2021 along with homebuilders and the
need to attack supply chain issues.
GDX is more of a pure play on the stocks of gold mining companies. It is also by far the
most frequently traded of the five ETFs. For those that are not frequent traders,
iShares MSCI Global Gold Miners ETFs (RING) might be worth a look. In every period
examined on the table, RING outperformed GDX with a significantly lower expense
ratio. Constraining expenses is an important component in wealth building.
How do ETFs holding portfolios of gold mining stocks differ from holding “gold ETFs?”
Let’s start with the basics. “Gold ETFs” are not Exchange Traded Funds (ETFs) at all
because there is no actual mutual fund involved. They are actually exchange-traded
trusts known as “grantor trusts.” This has tax implications as the IRS regards the
grantor trust as a pass-through structure that is taxed as if the underlying security was
being taxed. Presently, the IRS classifies gold as a collectible which has a different tax
schedule than capital gains from registered securities. Nevertheless, the term Gold ETF
has garnered public acceptance because the creation and redemption mechanism that
is used has become known as “the ETF wrapper.” For the sake of accuracy some
prefer the term ETVs (Exchange-Traded Vehicles). Unfortunately, since the term “gold
ETFs” is a misnomer that has become so widely used, we’ll use it with quotation marks
in this article. By definition the investment objective, as printed in the prospectus of a
gold ETF, is for the shares to reflect the performance of the price of gold bullion, less
expenses.
These are the five largest “Gold ETFs” in terms of Assets Under Management –
SPDR Gold Shares (GLD) is the largest and most widely held gold ETF in the world. Its
prospectus specifies that shares must be backed by fully allocated gold bullion in vaults
at all times. The trust's gold is fully allocated at the end of each business day. An
allocated account means the trust owns specifically identified gold bars. It was the first
U.S. “gold-backed ETF” and remains the standard for investors seeking direct exposure
to the gold market. The trust's sole asset is physical gold bullion, stored in secure vaults
in undisclosed locations.
iShares Gold Trust (IAU) - Like GLD, IAU is designed to track the spot price of gold by
holding fully allocated physical bullion in vaults located in New York and London. Its
expense ratio of 0.25% is much lower than the 0.40% charged by GLD. In all other
ways, IAU is a virtual replica.
SPDR Gold MiniShares Trust (GLDM) - The main differences between SPDR Gold
Shares ETF (GLD) and SPDR Gold MiniShares Trust (GLDM) are their share price and
expense ratios, with GLDM offering a lower price per share and a significantly lower
expense ratio as compared to GLD's 0.40% expense ratio. The price-per-share was set
proportionally lower to accommodate the perceived needs of retail investors. Otherwise,
the specifications for both are identical. As with GLD, The trust's sole asset is physical
gold bullion, stored in secure vaults in undisclosed locations. The expense ratio for the
trust has continually been revised downward in order to remain the lowest price
competitor. After launching at 0.20%, the expense ratio is now at 0.09% following the
launch of IAUM by BlackRock.
Abrdn Physical Gold Shares ETF (SGOL) - is backed by physical gold stored in vaults
in Zurich, Switzerland, and London. It aims to provide a cost-effective and convenient
way for investors to gain exposure to gold prices. The trust prioritizes using gold that
meets the London Bullion Market Association's (LBMA) "Responsible Gold Guidance."
This differentiation might have been made by ETF sponsor Aberdeen, a Scotland-based
company, to implicitly imply to some investors a higher standard than that used by State
Street and BlackRock to assure the trust is fully bullion-based. At launch time, SGOL
had the lowest fee among “Gold ETFs” of 0.17%. GLDM had been trading at 0.10%
entering 2025 but was lowered to 0.09% to regain at least a tie for lowest-cost gold
bullion exposure.
iShares Gold Trust Micro (IAUM) - is designed by BlackRock to give investors exposure
to the daily price movements of gold bullion at a minimal expense. Its expense ratio of
just 0.09%, lowest at the time of its mid-2021 launch, is now tied with GLDM for the
lowest among physically-backed gold ETFs.
Current ValuEngine reports on all covered stocks and ETFS can be viewed HERE

Here is the comparative table for analysis.

Ticker / Topic GLD IAU SGOL GLDM IAUM
iShares
abrdn SPDR Gold Gold Trust
Physical Minishares Micro ETF
Gold Trust of of
SPDR Gold iShares Shares beneficial Beneficial
Name Shares Gold Trust ETF interest Interest
Share Price $238.68 $48.80 $24.66 $51.19 $25.77
Assets($Bil) 113.7 54.2 5.8 19.9 4.1
Avg. Daily
Volume 10,066,847 6,615,103 4,110,711 3,551,387 2,641,436
1 Month
Returns 8.71% 8.72% 8.73% 8.73% 8.74%
YTD Price
Change 38.53% 38.72% 38.72% 38.80% 38.86%
3 Year
Returns 28.03% 28.22% 28.31% 28.42% 28.47%
 5 Year
Returns 12.95% 13.11% 13.21% 13.28% N/A
Expense Ratio 0.40% 0.25% 0.17% 0.09% 0.09%
Dividend Yield
% 0.00% 0.00% 0.00% 0.00% 0.00%
State
Issuer State Street BlackRock Abrdn Plc Street BlackRock
ST Cap Gains
Tax Rate
(implied) 40% 40% 40% 40% 40%
LT Cap Gains
Tax Rate
(implied) 28% 28% 28% 28% 28%

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Please note the effect on the returns from higher to lower fees. IAUM has the highest
return for all periods except the 5-year since it hasn’t been in existence for a full five
years yet. This is directly attributable to the fact that IAUM was launched at the lowest
fee. The differential in annualized returns in the three year period is 43 basis points.
The translation of fee differential into return differential affects investment principal
increasingly with the passage of time. We’ve heard some experts claim that the lower
trading volumes of GLDM and IAUM are only fit for retail products. Although 60%
lower, a daily trading volume surpassing 4 million is enough to keep the spreads at a
penny or two for almost all transactions. We conclude that for a trade of less than a
billion dollars or a duration less than three months, GLDM trades with enough liquidity
to easily meet the needs of most institutional and virtually all retail investors. As we
have pointed out in prior columns about SPLG and SPY, why should investors pay
more for the same exposures? As we have detailed, all of the top five ETFs are fully
backed by gold bullion with expense ratios being the one key differentiator.
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A key component of wealth management is managing costs. Therefore, we recommend

that readers who have made the decision to buy new gold shares strongly consider
purchasing GLDM in lieu of GLD after conducting their own due diligence.
As to the larger question posed at the outset as whether it is too late to add gold
exposure to the portfolio given the fact that it is trading at an all-time high, our analytics
can only say that the nearly 100% of Gold Miners stocks being rated by our valuation
model are overvalued in comparison to nearly 75% of stocks with more than $20 million
in Market cap. Since there are less than 40 stocks in the first sample and more than
2,000 stocks in the second, that’s probably not a statistically significant difference. It
also implies the wrong driver since the price of gold miner stocks are driven by the price
of gold. Since we would like these stocks to appreciate in the near term, that implies
that the price of gold will have increased to provide that impetus. That said, since our
proprietary models do not include commodities or currencies, we remain officially
neutral on future gold prices.
________________________________________________________________
_____

By Herbert Blank

Senior Quantitative Analyst, ValuEngine Inc ( www.ValuEngine.com )

support@ValuEngine.com (321) 325-0519

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