10-KPeriod: FY2014

SPDR GOLD TRUST Annual Report, Year Ended Sep 30, 2014

Filed November 25, 2014For Securities:GLD

Summary

This 10-K filing for the SPDR Gold Trust (GLD) for the fiscal year ending September 29, 2014, highlights its primary objective: to track the performance of gold bullion prices, less trust expenses. The trust's structure is designed to offer investors a convenient and cost-efficient way to gain exposure to gold, overcoming the logistical challenges of direct physical ownership. Shares are exchange-traded, providing liquidity and accessibility through standard brokerage accounts. The filing details the trust's operations, including the creation and redemption of shares in exchange for physical gold, the role of various service providers such as the Sponsor, Trustee, Custodian, and Marketing Agent, and the associated expenses. It also provides an overview of the global gold market, including supply and demand dynamics, and discusses the tax implications for U.S. and non-U.S. shareholders. Key risks identified include the direct correlation of share value to gold prices and potential issues with the London PM Fix benchmark used for valuation.

Financial Highlights

19 data points
Beta

Net Income

-$230.39M

EPS (Diluted)

$-0.85

Total Assets

$30.25B

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Gross Profit$6.30M
Operating Expenses$133.76M
Operating Income-$133.76M
Net Income-$230.39M
EPS (Basic)$-0.85
Shares Outstanding (Basic)270.25M

Key Highlights

  • 1The SPDR Gold Trust (GLD) aims to mirror the price performance of gold bullion, minus trust expenses.
  • 2Shares are exchange-traded on NYSE Arca, offering investors easy access to the gold market.
  • 3The Trust holds physical gold bullion, with no derivatives used.
  • 4Share creation and redemption are managed through Authorized Participants in exchange for physical gold.
  • 5Key service providers include World Gold Trust Services (Sponsor), BNY Mellon (Trustee), HSBC Bank USA, N.A. (Custodian), and State Street Global Markets (Marketing Agent).
  • 6Trust expenses, including fees for sponsorship, trustee, custody, and marketing, are paid through the sale of gold, impacting the amount of gold backing each share over time.
  • 7The valuation of the Trust's gold holdings primarily relies on the London PM Fix benchmark, which is subject to potential regulatory scrutiny and associated risks.

Frequently Asked Questions

The SPDR Gold Trust (GLD) is designed to reflect the performance of the price of gold bullion, less the Trust's expenses. It achieves this by holding physical gold bullion and issuing shares that represent fractional undivided beneficial interests in the Trust's gold holdings. The value of the shares is directly tied to the market value of the gold held by the Trust.

Shares are created and redeemed by Authorized Participants (APs) in large blocks called Baskets. APs can create new Baskets by delivering physical gold to the Trust, and they can redeem Baskets by receiving physical gold from the Trust. These transactions are based on the Net Asset Value (NAV) of the Trust's gold holdings at the time of the transaction. Individual investors typically buy and sell shares on the stock exchange.

The primary expenses include fees paid to the Sponsor (World Gold Trust Services), the Trustee (BNY Mellon), the Custodian (HSBC Bank USA, N.A.), and the Marketing Agent (State Street Global Markets). These fees, along with other administrative costs, are paid by selling a portion of the Trust's gold holdings. This means that over time, the amount of gold backing each outstanding share gradually decreases.

The primary risk is the direct correlation of the Share's value to the price of gold, meaning fluctuations in gold prices will directly impact the Share's value. Additionally, the Trust's reliance on the London PM Fix for valuation presents risks if this benchmark's integrity is compromised or if it changes. The ongoing sale of gold to cover trust expenses also means that the amount of gold per share will decrease over time, regardless of gold price movements.