01—Abstract
Summary
Summary of the 10-K filed November 28, 2017. Cited figures are marked; the original filing is the authoritative source.
SPDR Gold Trust (GLD) filed its annual report on Form 10-K for the period ending September 29, 2017.
The report highlights the Trust's objective to reflect the performance of the price of gold bullion, less expenses. The Trust holds physical gold bullion, acting as a passive investment vehicle. Key operational aspects include the creation and redemption of Shares through Authorized Participants, with gold as the underlying asset.
The Trust's expenses, primarily the sponsor's fee, are paid through the sale of gold. The report also details the gold industry landscape, market risks associated with gold price volatility, and the operational framework of the Trust, including its custodian and trustee. For investors, understanding GLD means understanding the price of gold and the trust's expense structure.
The report emphasizes that the value of GLD is directly tied to the price of gold, and any fluctuations in gold prices will materially impact the Shares' value. The fee structure, with a 0.40%a sponsor's fee, is also a critical factor for investors to consider in their overall return.
02—Key points
Key Highlights
- The SPDR Gold Trust (GLD) aims to provide investors with a convenient and cost-effective way to gain exposure to the price of gold bullion.
- Shares of GLD are exchange-traded and backed by physical gold held by a custodian.
- The Trust's investment objective is to track the performance of gold prices, less the Trust's expenses.
- Expenses, including a 0.40% annual sponsor's fee, are paid by selling gold, which gradually reduces the amount of gold represented by each share over time.
- The value of GLD is directly correlated with the market price of gold, and is subject to its volatility.
- Creation and redemption of Shares are conducted in Baskets by Authorized Participants, ensuring the Shares' market price generally stays close to the Net Asset Value (NAV) of the underlying gold.
- The report details the gold industry's supply and demand dynamics, as well as the operational framework involving the Sponsor, Trustee, and Custodian.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed November 28, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Operating Expenses | $136.08M$127.08M | +7.1% |
| Operating Income | -$136.08M-$127.08M | −7.1% |
| Net Income | -$1.89B$4.95B | −138.3% |
| EPS (Basic) | $-6.59$18.36 | −135.9% |
| Shares Outstanding (Basic) | 287.35M269.74M | +6.5% |
05—Questions
Frequently Asked Questions
What is the primary objective of the SPDR Gold Trust (GLD)?
The primary 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 offer investors a cost-effective and convenient way to gain investment benefits similar to holding physical gold.
How are expenses for GLD handled?
The Trust's expenses, primarily the sponsor's fee (0.40% of daily NAV), are paid by selling the Trust's gold holdings. This means that over time, the amount of gold represented by each Share gradually decreases, irrespective of the gold price movement.
What are the risks associated with investing in GLD?
The primary risk is the volatility of the price of gold. Fluctuations in gold prices can materially affect the value of GLD Shares. Other risks include potential discrepancies in the LBMA Gold Price calculation, the Trust's passive investment strategy, and the possibility of Shares trading at a premium or discount to their Net Asset Value (NAV).
How does GLD ensure its Share price stays close to the value of its gold holdings?
GLD utilizes an 'Authorized Participant' mechanism for the creation and redemption of Shares in Baskets. This process, which involves exchanging gold for Shares and vice-versa, helps to keep the market price of the Shares aligned with the Net Asset Value (NAV) of the underlying gold.
06—Continue