If you follow precious metals investing at all, you've heard of GLD and IAU. They're the two most talked about gold ETFs by a wide margin — covered by every major financial publication, held by institutions and retail investors alike, and referenced constantly in conversations about portfolio diversification. What you hear about a lot less is IAUM, and I genuinely don't understand why.
IAUM is iShares' Gold Trust Micro ETF. It tracks the same gold price as IAU. It's backed by the same physical gold. It's managed by the same issuer. The price moves are nearly identical. But it charges an expense ratio of just 0.09% per year — compared to 0.25% for IAU and 0.40% for GLD. For a long-term gold holder, that difference is not trivial.
Let's Talk About What These Funds Actually Cost You
Expense ratios are easy to ignore because they look small in isolation. But they compound in the wrong direction over time — they're a continuous drag on your returns every single year you hold the fund.
Here's what the difference looks like on a $20,000 position held for 20 years, assuming gold's price stays flat just to isolate the fee impact:
- GLD at 0.40%: You lose roughly $1,600 to fees over 20 years
- IAU at 0.25%: You lose roughly $1,000 to fees over 20 years
- IAUM at 0.09%: You lose roughly $360 to fees over 20 years
That's a $1,240 difference between GLD and IAUM on a $20,000 position. And that's before factoring in gold's actual price appreciation, which makes the compounding effect of the lower fee even more pronounced when the underlying asset is growing.
GLD costs more than four times as much as IAUM annually to hold the same exposure. IAU costs almost three times as much. When you understand that these funds track the same price of gold and are both physically backed, it becomes very hard to justify paying the higher fees.
So Why Does Anyone Still Buy GLD or IAU?
Liquidity, mostly — and it's a legitimate reason for some investors.
GLD is the largest gold ETF in the world with over $78 billion in assets and daily trading volume that institutional investors and active traders rely on. When you're moving large positions quickly and care deeply about bid-ask spreads and execution efficiency, GLD's liquidity is genuinely valuable. IAU also has strong liquidity with around $82 billion in assets and tight spreads.
IAUM has a much smaller asset base — currently over $1.2 billion — and lower daily trading volume. For someone trading gold actively or moving very large positions, that matters.
But here's the thing: if you're a long-term buyer and holder of gold as part of your portfolio — which is how I use it and how most individual investors should think about precious metals — liquidity is largely irrelevant. You're not trying to execute large trades instantly with minimal slippage. You're buying and holding. The spread on IAUM is not going to materially affect a long-term position. The expense ratio absolutely will.
Why I Buy IAUM
I hold precious metals as a long-term part of my portfolio. Gold as a hedge, as a store of value, as an asset that historically moves independently from stocks and bonds. I'm not trading in and out of it. I buy and I hold.
For that use case, IAUM is the obvious choice to me. I get the same gold exposure I'd get from IAU or GLD. The price movement is essentially identical — both track the LBMA Gold Price and are physically backed by gold bullion held in secure vaults. The only meaningful difference for a long-term holder is the annual fee, and IAUM wins that comparison by a significant margin.
I think the reason IAUM doesn't get more attention comes down to one thing: it's newer. iShares launched it in 2021, which means it doesn't have the multi-decade track record and institutional familiarity that GLD and IAU have built up. Financial media covers what people already know. Most people know GLD and IAU, so that's what gets written about. IAUM quietly sits there with the lowest expense ratio of the major physically-backed gold ETFs, doing exactly what it's supposed to do, with very little fanfare.
One Thing Worth Knowing About IAUM's Structure
IAUM represents 1/100th of an ounce of gold per share, compared to IAU's 1/50th of an ounce. That means IAUM shares are priced lower, which actually makes it easier to invest smaller amounts and scale up gradually over time. For someone building a position steadily through regular purchases, the lower per-share price gives you more flexibility in how you size each buy.
The Bottom Line
If you're a long-term precious metals investor looking for gold exposure through an ETF, IAUM deserves serious consideration. Same physical gold backing as IAU. Nearly identical price movement. A fraction of the cost.
The lack of attention it gets compared to GLD and IAU is a product of its age, not its quality. The expense ratio of 0.09% is one of the lowest available for a physically-backed gold ETF from a major issuer. For a buy-and-hold investor, that's the number that matters most — and on that metric, IAUM wins clearly.
Disclosure: This article reflects the personal opinions of the author and is not financial advice. We are not licensed financial advisors. All investing involves risk including the potential loss of principal. Precious metals prices are volatile and can decline significantly. Always do your own research before making investment decisions.