Gold Bullion or Gold Miners: Which Fits Your Portfolio Better? GDX vs AAAU

VanEck Gold Miners ETF (NYSEMKT:GDX) and Goldman Sachs Physical Gold ETF (NYSEMKT:AAAU) differ sharply: GDX holds gold miners’ stocks, bringing higher volatility and bigger recent gains, while AAAU offers direct gold exposure with lower costs and smaller drawdowns.

This comparison compares GDX, which provides exposure to a basket of gold mining companies, and AAAU, a fund designed to track the price of physical gold. The two ETFs may appeal to different types of investors, depending on whether equity risk or commodity exposure is the priority.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

AAAU is more affordable, charging an expense ratio of 0.18% compared to GDX’s 0.51%, which may appeal to cost-conscious investors. GDX does pay a small dividend, while AAAU does not distribute income.

Performance & risk comparison

What's inside

AAAU is structured to reflect the price of physical gold, offering pure exposure to the commodity over its seven point seven-year track record. The fund does not invest in companies and instead holds gold bullion, making it simple for those seeking direct gold price participation. AAAU’s performance is directly tied to gold prices.

GDX, in contrast, invests exclusively in gold mining companies within the basic materials sector. Its top holdings include Agnico Eagle Mines Ltd (TSX:AEM.TO), Newmont Corp (NYSE:NEM), and Barrick Mining Corp (TSX:ABX.TO). This structure introduces additional risks and potential rewards linked to the operational and financial performance of gold miners, rather than just gold’s spot price. Both funds avoid leverage, currency hedging, or other structural quirks.

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What this means for investors

Gold exposure can take two very different forms: owning the metal itself or owning the companies that mine it. That distinction lies at the heart of the difference between the VanEck Gold Miners ETF (GDX) and the Goldman Sachs Physical Gold ETF (AAAU), even though both ETFs are tied to the price of gold.

AAAU is built to track gold directly by holding physical bullion, so its returns are closely linked to movements in the metal and to macro forces such as real interest rates, inflation expectations, and currency trends. GDX takes a different route by holding shares of gold mining companies. That structure adds equity-market exposure and operating risk, including the effect of production costs and company execution. When gold prices rise, miners can see profits expand faster than the metal itself, but those same dynamics can magnify losses when costs rise or gold weakens.

For investors, the real choice is not simply how much gold exposure to own, but whether that exposure should come from the metal itself or from businesses tied to it. AAAU is the cleaner choice for investors seeking direct gold price exposure as a hedge or diversification tool. GDX is better understood as an equity strategy linked to gold, where returns depend on both the metal and the fortunes of the mining companies themselves. AAAU may be more aligned with investors using gold as a hedge or stabilizing asset, while GDX may appeal to those willing to take on equity risk in pursuit of higher upside tied to gold prices.

Eric Trie has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.