IAU ETF Review: Is iShares Gold Trust Worth Buying?
iShares Gold Trust offers the same physical gold exposure as GLD at a lower 0.25% expense ratio, making it the preferred long-term accumulation vehicle for Energy Macro investors building strategic gold positions as a debasement hedge.
What Is IAU?
The iShares Gold Trust (IAU) is BlackRock's gold bullion ETF, holding physical gold bars in secure vaults. Each share represents fractional ownership of gold, with the trust designed to track gold spot prices minus fees. Launched in 2005, it's one of the largest and most liquid ways to own gold through a brokerage account.
The fund charges a 0.25% expense ratio and holds $68.4 billion in assets, making it the second-largest gold ETF after SPDR Gold Shares (GLD).
Current Snapshot
| Metric | Value |
| Price | $91.20 |
| YTD Return | -10.21% |
| 1-Year Return | 71.8% |
| Expense Ratio | 0.25% |
| AUM | $68.4B |
| Dividend Yield | 0% |
Why It Matters for Real Asset Investors
IAU serves as the ultimate debasement hedge in the Energy Macro framework. When central banks print money to fund infrastructure spending, energy transitions, or crisis response, that newly created currency has to go somewhere. Gold has absorbed monetary expansion for 5,000 years because you can't print more of it.
Unlike gold miners that face operational risks, or gold futures that require rolling contracts, IAU gives you direct exposure to the metal itself. When the Federal Reserve's balance sheet expands, when fiscal deficits explode, or when other central banks lose credibility, gold typically outperforms because it's the only major asset with zero counterparty risk.
The current pullback from recent highs reflects stronger dollar momentum and reduced recession fears. But the underlying monetary dynamics remain intact: governments worldwide are running unsustainable fiscal paths that historically favor hard assets over paper claims.
Top Holdings
IAU holds only physical gold bars stored in vaults operated by JPMorgan Chase Bank in London. The fund owns approximately 1,074 metric tons of gold bullion, with each bar meeting London Bullion Market Association good delivery standards. Unlike equity ETFs, there are no individual company holdings—just pure exposure to the gold price.
The trust publishes a complete bar list daily, showing the serial number, weight, and refiner for each gold bar in custody. This transparency distinguishes IAU from paper gold products or allocated accounts where you never know exactly what you own.
How It Fits the Portfolio
IAU works best as a 5-15% allocation within the real assets sleeve, serving as insurance rather than speculation. I view it as portfolio ballast during monetary crises, not a growth play. The metal performs when traditional assets struggle—think 2008, 2020, or the 1970s stagflation period.
Size your position based on how much debasement protection you need, not expected returns. Gold doesn't yield income or grow earnings, so it only makes sense if you believe fiat currencies will lose purchasing power faster than productive assets can compound. Pair it with income-generating real assets like REITs or infrastructure to balance yield with protection.
Regime Signals
IAU outperforms during three key macro regimes: monetary expansion (when central bank balance sheets grow), currency crises (when major currencies weaken), and stagflation (when growth slows but inflation persists). It typically underperforms during periods of rising real yields, economic acceleration, or dollar strength.
Watch for gold breakouts when the 10-year Treasury yield minus CPI turns negative—that's when holding zero-yield assets makes mathematical sense. Also monitor central bank gold purchases; when sovereign institutions buy gold, it signals concern about the international monetary system.
Related Research
- Alabama Power Grid Risk Assessment
- Exxon Mobil (XOM) Tollbooth Analysis
- GLD: SPDR Gold Shares
- PHYS: Sprott Physical Gold Trust
- GDX: VanEck Gold Miners ETF
Frequently Asked Questions
Is IAU better than GLD for long-term investors?
For buy-and-hold investors, IAU is generally the better choice due to its lower 0.25% expense ratio versus GLD's 0.40%. Over a 10-year holding period, this 0.15% annual savings compounds meaningfully. However, GLD offers deeper options markets and tighter spreads for active traders. If you are simply accumulating gold exposure in a portfolio, IAU delivers the same physical gold backing at lower cost.
What is the expense ratio of IAU?
IAU charges 0.25% annually, making it one of the cheapest physically-backed gold ETFs available. This compares favorably to GLD's 0.40% and is close to the lowest-cost gold ETFs on the market. The fee is deducted from the trust's gold holdings, so IAU's price slowly drifts below spot gold by approximately 0.25% per year.
Does IAU hold physical gold?
Yes, IAU holds allocated physical gold bars in vaults managed by JPMorgan Chase in London and New York. Each share represents a fractional ownership of the trust's gold holdings. Like GLD, individual shareholders cannot redeem for physical metal — only authorized participants can. The trust publishes its gold bar list regularly for transparency.
How does IAU fit into a diversified portfolio?
Within the Energy Macro framework, IAU serves as a core strategic allocation to gold — typically 5-15% of a real-assets portfolio. Gold provides portfolio insurance against currency debasement, negative real rates, and geopolitical instability. IAU's low cost makes it ideal for the portion of gold allocation that sits passively, while GLD or futures may be used for tactical overlays.
For our complete allocation framework across real assets, infrastructure, and income strategies, see The Blackout Fortune Playbook.
Last updated: February 1, 2026 | Data: Yahoo Finance, BlackRock filings
