The GLD ETF Has A History Of Not Falling With Stocks

A fund that holds its ground when stocks are falling is what genuine portfolio diversification can look like.

In a recent market selloff, the S&P 500 fell 18.8%, erasing value from millions of portfolios. During that same period, one fund returned a positive 1.6%. That fund is the SPDR Gold Trust (GLD), an exchange-traded fund designed to give investors a way to invest in gold. It is a commodity or real-asset fund that aims to mirror the market price movements of physical gold bullion.

When stocks are under pressure, the natural question is what, if anything, actually holds up. The search for a cushion can be frustrating, as many funds tend to fall in unison. The record shows this one has often been an exception.

How Has It Held Up In Selloffs?

The performance during that deep drawdown was not a fluke. The SPDR Gold Trust has reliably held up when the S&P 500 fell. Across the last 5 S&P 500 drawdowns, GLD held up in 4 of them. In one 2024 selloff, for instance, the S&P 500 fell 5.4% while GLD returned +8.8%. That is the kind of sharp contrast that can buffer a portfolio during a downturn.

What Kind Of Defense Is This?

This is not a fund of defensive stocks. It is a move into a different asset class entirely. As a commodity or real-asset fund, its value is tied to gold, which often moves to the beat of its own drum, driven by factors like inflation, currency fluctuations, and geopolitical stress rather than corporate earnings. This provides a layer of defense that is largely uncorrelated with the stock market. That independence comes with its own character; over the past year, GLD has run at about 28% annualized volatility, versus about 13% for the S&P 500, so it can be a volatile holding in its own right.

Does It Work Every Single Time?

No defender is perfect, and it is important to be clear-eyed about that. While the fund’s record is strong, it has not held up in every single market drop. In a 2026 selloff, the S&P 500 fell 8.9%, and GLD returned -12.9%. Past performance is never a guarantee of future results, and this fund is no exception. Its role as a defender is a historical pattern, not an ironclad promise.

So, Where Does This Fit In A Portfolio?

The point here is not to predict the market’s next move or to suggest a specific trade. It is to ask a more fundamental question about your own portfolio construction. When the stock market falls, do you own anything that has a history of cushioning the blow? Looking at the record of a fund like GLD is a concrete way to think about what true diversification means in practice.

Is There A Fund That Defends Even Better?

Knowing GLD held up is a start, but it raises the sharper question: is it the best at this, or does another fund cushion a selloff even more for less of a trade-off? That is worth checking before you lean on any single defender.

Our Drawdown Defenders screen answers it directly. It ranks the funds that held up across the recent S&P 500 selloffs by how far they beat the S&P during those drops, how many of the selloffs each one defended, and what they have actually returned since, with annualized return, volatility, Sharpe and Sortino all measured over the same stretch. It leans toward the defenders that kept their upside too, not just the funds that sat out the drop, so you can see where GLD sits and which funds protected without giving up as much. For the wider picture on valuation and long-run performance, the ETF Valuation and Performance Scorecard ranks the major funds side by side.

What Are You Giving Up For Safety?

There is a catch worth saying plainly. A fund that barely moves when stocks fall usually barely moves when they rally, either. Lean too hard on defenders, and you trade away the upside that actually grows a portfolio over time, swapping one regret for another. The aim is not maximum defense; it is the right balance between protecting the downside and still owning the recovery.

That balance is the idea behind our High Quality (HQ) Portfolio: a rules-based, multi-factor mix built to participate in the upside while screening for the quality and resilience that softens the falls, rebalanced on a schedule so no single shock, and no single defensive bet, decides the outcome. It has a record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.