10-KPeriod: FY2012

SPDR GOLD TRUST Annual Report, Year Ended Sep 30, 2012

Filed November 28, 2012For Securities:GLD

Summary

This 10-K filing for SPDR Gold Trust (GLD) for the fiscal year ending September 29, 2012, highlights the Trust's objective: to reflect the performance of the price of gold bullion, less expenses. The Trust operates passively, holding physical gold bullion as its primary asset. The Shares are designed to offer investors a convenient and cost-efficient way to gain exposure to the gold market, overcoming the traditional barriers of storing and insuring physical gold. Key financial performance indicates significant gains driven by the appreciation of gold. However, investors should be aware that the Trust incurs ongoing expenses, which are paid by selling gold, leading to a gradual decrease in the amount of gold backing each Share over time. The filing also details the operational structure, including the roles of the Sponsor, Trustee, Custodian, and Marketing Agent, as well as the risks associated with investing in gold and the structure of the Trust.

Financial Highlights

17 data points
Beta

Net Income

$2.41B

EPS (Diluted)

$5.71

Total Assets

$50.73B

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Gross Profit$87.96M
Operating Expenses$271.77M
Net Income$2.41B
EPS (Basic)$5.71
Shares Outstanding (Basic)421.63M

Key Highlights

  • 1SPDR Gold Trust's primary investment objective is to track the performance of gold bullion prices, minus Trust expenses.
  • 2The Trust holds physical gold bullion and does not engage in derivative trading.
  • 3Shares are created and redeemed in Baskets exclusively by Authorized Participants, who are typically large financial institutions.
  • 4The Trust incurs operating expenses (Sponsor, Trustee, Custodian, Marketing Agent fees, administration) that are paid by selling gold, causing the gold backing per Share to gradually decrease over time.
  • 5In the fiscal year ending September 29, 2012, the Trust reported a total gain on gold of $2,678,980,000, primarily driven by gains on gold distributed for share redemptions ($2,591,017,000).
  • 6The market value of gold holdings was significantly higher than the cost at year-end ($76,019,208,000 vs. $50,726,261,000), reflecting gold price appreciation.
  • 7The filing outlines various risks, including gold price volatility, potential discounts/premiums of Share trading price to NAV, and operational risks related to gold custody.

Frequently Asked Questions

SPDR Gold Trust aims to provide exposure to gold prices by holding physical gold bullion. The Trust issues Shares that are designed to reflect the performance of the price of gold bullion, less the Trust's operating expenses. Investors can buy and sell these Shares on stock exchanges, offering a convenient way to invest in gold without directly handling the physical commodity.

The Trust incurs operating expenses including fees for the Sponsor, Trustee, Custodian, Marketing Agent, and general administration. These expenses are paid by selling portions of the Trust's gold holdings. This means that over time, the amount of gold backing each Share gradually decreases, even if the gold price remains stable or increases.

Authorized Participants (APs) are typically large financial institutions that have entered into an agreement with the Trust. They are the only entities that can create or redeem Baskets of GLD Shares. APs deposit gold with the Trust to create Shares, and redeem Shares to receive gold. They then typically sell these Shares to the broader market.

Key risks include the inherent volatility of gold prices, which directly impacts the value of the Shares. The filing also points out that Shares may trade at a price above or below their Net Asset Value (NAV), potentially widening due to market conditions. Additionally, the Trust's passive nature means it does not actively manage gold holdings or use hedging strategies, and expenses are paid by selling gold, which reduces the gold backing per Share over time.