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Why SPDR Gold Shares Is Poised to Keep Plunging

By Brian D. Pacampara, CFA - Apr 16, 2013 at 6:41PM

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Market-lagging returns could be written in this 2-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the SPDR Gold Shares ETF (NYSE: GLD) has received a distressing two-star ranking.

With that in mind, let's take a closer look at GLD and see what CAPS investors are saying about the ETF right now.

GLD facts

  

Inception

Nov. 2004

Total Net Assets

$57.2 billion

Investment Approach

Seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets.

Expense Ratio

0.4%

1-Year / 3-Year / 5-Year Returns

(18.4%) / 4.9% / 7.5%

Alternatives

iShares Gold Trust 

ETFS Physical Swiss Gold Shares

Market Vectors Gold Miners 

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 14% of the 3,506 members who have rated GLD believe the ETF will underperform the S&P 500 going forward.

Just last week, one of those Fools, Raphael1990, succinctly summed up GLD bear for our community:

Gold is only an inflation hedge and it is not even a good one! So why buy gold, if you might as well buy property as inflation hedge?

The only reason to buy gold is, if you believe it will go up, because people look for a safe haven, which was a reasonable investment thesis in 1999 and 2007. But by now you can assume that everyone knows about gold and everybody who wants to own gold, already owns it.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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