01—Abstract
Summary
Summary of the 10-K filed November 24, 2015. Cited figures are marked; the original filing is the authoritative source.
The SPDR Gold Trust (GLD) 10-K filing for the fiscal year ended September 30, 2015, reveals a passive investment vehicle designed to track the price of gold bullion.
The Trust holds physical gold, and its Shares represent fractional ownership interests in this gold. Key operational aspects include the creation and redemption of Shares through Authorized Participants and the daily valuation of gold based on the LBMA Gold Price. Financially, the Trust experienced a significant net loss of $2,685,202,000a for the fiscal year ended September 30, 2015.
This loss is primarily attributed to a substantial unrealized depreciation on its gold holdings. The Trust's expenses are managed by the Sponsor, who assumed responsibility for all ordinary expenses in exchange for a fee, which was the primary recurring expense for the period. Investors should note that the amount of gold backing each share gradually decreases over time due to the sale of gold to cover Trust expenses.
02—Key points
Key Highlights
- The Trust's primary objective is to reflect the performance of the price of gold bullion, less expenses.
- Gold is held by HSBC Bank plc as the Custodian in London.
- The Trust experienced a net loss of approximately $2.685 billion for the fiscal year ended September 30, 2015.
- As of September 30, 2015, the Trust held 21,995.8 ounces of gold with a market value of $24.5 billion.
- Effective July 17, 2015, the Sponsor's fee became the sole recurring fixed expense for the Trust, set at 0.40% of the daily Net Asset Value.
- The LBMA Gold Price is used for daily valuation of the Trust's gold holdings.
- The amount of gold represented by each Share is expected to gradually decrease over time due to the sale of gold to cover Trust expenses.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed November 24, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Gross Profit | $0$6.30M | −100.0% |
| Operating Expenses | $114.11M$133.76M | −14.7% |
| Operating Income | -$110.01M-$133.76M | +17.8% |
| Net Income | -$2.69B-$230.39M | −1065.5% |
| EPS (Basic) | $-11.10$-0.85 | −1205.9% |
| Shares Outstanding (Basic) | 241.86M270.25M | −10.5% |
05—Questions
Frequently Asked Questions
How does the SPDR Gold Trust (GLD) work?
The SPDR Gold Trust (GLD) is an investment trust that holds physical gold bullion. Shares of the Trust represent fractional undivided beneficial interests in the gold held by the Trust. Investors can buy and sell these Shares on stock exchanges, providing a convenient way to gain exposure to the price of gold without directly holding the physical commodity.
What is the main risk associated with investing in GLD?
The primary risk is the fluctuation in the price of gold. The value of the Shares is directly tied to the market value of the gold held by the Trust. If the price of gold declines, the value of the Shares will also decline. Additionally, the amount of gold backing each share gradually decreases over time due to the sale of gold to cover the Trust's operating expenses.
How are the Trust's expenses managed?
Effective July 17, 2015, the Trust's only recurring expense is the Sponsor's fee, which accrues daily at an annual rate of 0.40% of the daily Net Asset Value. In exchange for this fee, the Sponsor assumes responsibility for all ordinary fees and expenses of the Trust, including those of the Trustee, Custodian, and marketing agent. Previously, these expenses were itemized and paid by the Trust.
How is the value of the gold and the Shares determined?
The value of the gold held by the Trust is determined daily based on the LBMA Gold Price PM. The Net Asset Value (NAV) per Share is calculated by subtracting the Trust's liabilities (including accrued expenses) from the total value of its gold holdings and dividing by the number of outstanding Shares. The Shares then trade on the NYSE Arca at market prices that can fluctuate around the NAV.
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