10-KPeriod: FY2010

SPDR GOLD TRUST Annual Report, Year Ended Sep 30, 2010

Filed November 22, 2010For Securities:GLD

Summary

The SPDR Gold Trust (GLD), as of its fiscal year ending September 30, 2010, reported robust performance reflecting the appreciation of gold prices. The Trust's primary objective is to track the performance of gold bullion, less expenses. During the reporting period, the Trust held approximately 41.8 million ounces of gold, with a market value exceeding $54 billion. Significant gains were recorded both from gold sold to cover expenses and from gold distributed during share redemptions. Investors in GLD benefit from a cost-effective and accessible way to gain exposure to gold. The Trust's shares are traded on major exchanges, offering liquidity and ease of trading compared to direct physical gold ownership. Key expenses include custody, trustee, sponsor, and marketing fees, which are borne by the Trust through periodic sales of gold. The Trust's structure as a grantor trust ensures that it is not directly taxed at the entity level, with gains and losses flowing through to shareholders.

Financial Highlights

17 data points
Beta

Net Income

$1.21B

EPS (Diluted)

$3.10

Total Assets

$37.99B

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Gross Profit$45.83M
Operating Expenses$177.12M
Net Income$1.21B
EPS (Basic)$3.10
Shares Outstanding (Basic)389.97M

Key Highlights

  • 1The SPDR Gold Trust (GLD) holds physical gold bullion as its primary asset, aiming to mirror the price performance of gold.
  • 2As of September 30, 2010, the Trust held approximately 41.8 million ounces of gold with a market value of over $54.6 billion.
  • 3The Trust generated significant gains from gold distributed during share redemptions and from gold sold to cover operational expenses.
  • 4GLD shares are exchange-traded, offering investors a convenient and liquid method to gain exposure to gold without the complexities of physical storage and insurance.
  • 5Key expenses include custody, trustee, sponsor, and marketing fees, which are managed through the Trust's gold holdings.
  • 6The Trust operates as a grantor trust for U.S. federal income tax purposes, meaning income and gains are passed through to shareholders.

Frequently Asked Questions

The primary investment objective of the SPDR Gold Trust (GLD) is for its Shares to reflect the performance of the price of gold bullion, less the Trust's expenses. It aims to provide investors with a cost-effective and convenient way to gain exposure to the gold market.

The value of GLD shares is directly linked to the value of the physical gold bullion held by the Trust. The Net Asset Value (NAV) per share is calculated by valuing the Trust's gold holdings based on the London PM fix price and then subtracting accrued expenses and liabilities.

The main expenses incurred by the Trust include fees paid to the Sponsor (0.15% of ANAV), the Trustee (0.02% of ANAV), the Custodian (varying rates based on ounces), and the Marketing Agent (0.15% of ANAV), as well as other administration fees such as legal and audit expenses. These expenses are paid by selling the Trust's gold.

Investors can buy or sell GLD shares on major stock exchanges, such as NYSE Arca, through a brokerage account. Shares are created or redeemed from the Trust in large blocks called 'Baskets' by Authorized Participants, who are typically large financial institutions.

For U.S. federal income tax purposes, the Trust is treated as a grantor trust. Shareholders are taxed as if they directly owned a pro rata share of the underlying gold. Gains on the sale of gold by the Trust or by the shareholder, or gains attributable to the appreciation of gold held by the Trust, are generally treated as capital gains. Gold is considered a 'collectible' for tax purposes, meaning long-term capital gains on gold held for over a year may be taxed at a higher rate (up to 28%) than other long-term capital gains.