AAAU vs. SGDM: Direct Gold Exposure or Gold Mining Companies?

These two ETFs focus on one of the most coveted precious metals in the world, yet their investment approaches differ. It can be difficult to purchase physical gold bars, as people may lack the space to store the precious metal safely, and may not even know where to buy it in person. But there are two ETFs that can offer investors ways to invest in gold indirectly, without needing to hold it physically: the Sprott Gold Miners ETF (SGDM +6.53%) and Goldman Sachs Physical Gold ETF (AAAU +2.41%).Snapshot (cost & size)MetricSGDMAAAUIssuerSprottGoldmanExpense ratio0.50%0.18%1-yr return (as of Feb. 14, 2026)149.88%73.1%Beta0.530.13AUM$823.1 million$3.11 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.AAAU stands out as the more affordable option with a 0.18% expense ratio that’s less than half of SGDM's. However, SGDM has more than doubled AAAU’s one-year return. Performance & risk comparisonMetricSGDMAAAUMax drawdown (5 y)(45.05%)(20.94%)Growth of $1,000 over 5 years$2,667$2,681What's inside Launched seven years ago, AAAU is designed to track the performance of physical gold, offering investors direct gold exposure by allocating 100% of its holdings in gold bars held in the U.K. SGDM, in contrast, invests in 43 stocks within the global gold mining industry. The largest positions include Agnico Eagle Mines Ltd. (TSX:AEM.TO), Newmont Corp. (NEM +6.55%), and Wheaton Precious Metals Corp. (TSX:WPM.TO). For more guidance on ETF investing, check out the full guide at this link. What this means for investorsIn 2025, the precious metals market skyrocketed, with many metals often following Gold's price movements. Gold, along with other metals, is seen as a hedge against the U.S. dollar, especially during periods of geopolitical and economic turbulence. With international tariffs and heightened tensions throughout 2025 and this year, demand and prices for metals have risen significantly. Since the start of 2025 up until Feb. 14, 2026, the price of gold per ounce has nearly doubled. This doesn’t mean that investing in gold doesn’t come with risk. Precious metals can move much more volatile than the stock market at times. And even though SGDM doesn’t hold gold directly, the companies it holds rely on it to increase in value. Another risk to note is that SGDM holds many foreign companies, which may lead to greater price volatility than in American stocks. So investors based in the U.S. may want to be cognizant of that. Regardless, if investors are willing to take on the risk, both of these ETFs offer great ways to invest in gold. Read NextFeb 14, 2026 •By Adé HennisAAAU vs. SIL: Comparing Direct & Indirect Exposure to Precious MetalsFeb 14, 2026 •By Adé HennisAAAU & SLV: Two Precious Metal ETFs That Can Add Some Shine to Your PortfolioJan 26, 2026 •By Adé HennisGold & Silver ETFs: Comparing AAAU vs. SLVPJan 20, 2026 •By Will HealyPPLT Delivers Bigger Gains Than AAAU but Swings More WidelyDec 20, 2025 •By Neha ChamariaGold ETFs Boom: GLD Is Larger in Size But AAAU Is More AffordableNov 9, 2025 •By Neha ChamariaGold ETFs: SPDR Gold Shares Offers Scale While AAAU Is More AffordableStocks MentionedGoldman Sachs Physical Gold ETFNYSEMKT: AAAU$49.65 (+2.41%) $+1.17Sprott Funds Trust - Sprott Gold Miners ETFNYSEMKT: SGDM$84.78 (+6.53%) $+5.20*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.