01—Abstract
Summary
Summary of the 10-K filed November 23, 2022. Cited figures are marked; the original filing is the authoritative source.
SPDR Gold Trust (GLD) reported its fiscal year ended September 30, 2022 in this 10-K, filed November 23, 2022.
The Trust holds only allocated London gold bullion (30.32 million ounces, 100% allocated, held by HSBC as custodian) and does not use derivatives or active management. Its gold was valued at $50.69 billiona at the LBMA Gold Price PM of $1,671.75 per ounce, down from $55.47 billion a year earlier, so net assets fell to $50.49 billion. Net asset value per Share ended the year at $155.69, versus $162.96 a year earlier, a total return at NAV of -4.46%.
The Trust posted a net loss of $2.94 billionb ($8.39 per share), driven by an unrealized depreciation of $4.83 billion on gold holdings, partly offset by $2.09 billion of realized gains on gold distributed for share redemptions. Share flows were net negative in FY2022: 97.8 million shares were created and 113.8 million redeemed, leaving 324.3 million shares outstanding (down from 340.3 million). Because the Trust redeems gold only in Baskets and the sponsor fee of 0.40% of NAV is its only recurring expense (paid from gold sales, $238.5 million in FY2022), the amount of gold per share declines steadily over time.
Investors should understand that the Shares track gold less this erosion, that gold price moves drive nearly all of the Trust's value, and that the Trust carries custody-related risks, including limited recourse against the custodian and subcustodians and unallocated gold held temporarily during creations and redemptions. The filing also flags geopolitical and market-structure risks: the Russia-Ukraine conflict and related sanctions on Russian gold, and reliance on the LBMA Gold Price PM as the valuation benchmark.
The auditor, KPMG, issued unqualified opinions on both the financial statements and internal control over financial reporting, and the Trust reported no material weaknesses. Taken together, the filing shows a passive, low-cost gold vehicle whose FY2022 performance tracked a weaker gold price and modest net redemptions.
02—Key points
Key Highlights
- Net loss of $2.94 billion ($8.39 per share) for FY ended Sep 30, 2022, driven by a $4.83 billion unrealized depreciation on gold holdings, partly offset by $2.09 billion of realized gains on redemptions.
- Net assets declined to $50.49 billion from $55.46 billion; NAV per Share fell to $155.69 from $162.96 (-4.46% total return at NAV; -5.82% at market value).
- Holdings of 30,323,468 ounces of allocated London Good Delivery gold, valued at $50.69 billion using the LBMA Gold Price PM of $1,671.75/oz on Sep 30, 2022.
- Net share outflows: 97.8 million shares created versus 113.8 million redeemed, reducing shares outstanding to 324.3 million from 340.3 million.
- Sponsor fee of 0.40% of NAV was the only recurring expense, totaling $238.5 million in FY2022 and paid through the gradual sale of gold, which steadily reduces the gold backing each Share.
- Trust uses no derivatives or leverage and is not actively managed; it sells gold only to pay expenses, redemptions, or on termination.
- Key risks flagged include custodian and subcustodian recourse limits, unallocated gold exposure during creations/redemptions, Russia-Ukraine sanctions effects on gold markets, and reliance on the LBMA Gold Price PM benchmark.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed November 23, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Operating Expenses | $238.50M$257.60M | −7.4% |
| Net Income | -$2.94B-$5.75B | +48.8% |
| EPS (Basic) | $-8.39$-15.25 | +45.0% |
| Shares Outstanding (Basic) | 350.92M376.93M | −6.9% |
05—Questions
Frequently Asked Questions
Why did the Trust report a net loss when it holds no operating business?
The loss is non-cash and reflects accounting for gold at fair value. The Trust recorded a $4.83 billion unrealized depreciation on its gold as the LBMA Gold Price PM fell from $1,742.80 to $1,671.75 per ounce over the year, and that was only partly offset by $2.09 billion of realized gains on gold delivered for redemptions. Sponsor fees of $238.5 million were a further drag, but the Trust's operating cash flow was zero because gold sold to pay expenses exactly matched those expenses.
How does the Trust's fee structure affect my investment over time?
The Sponsor fee is 0.40% of NAV annually and is the Trust's only recurring cost. Because the Trust sells gold to pay it, each Share represents a slightly smaller amount of gold over time, even if gold's price is flat. The filing notes that the Shares' trading price is expected to gradually decline relative to the gold price for this reason, so long-term holders should expect a modest, steady drag relative to spot gold.
What happens to my investment if the Trust is terminated?
The Trust terminates only upon agreement of Shareholders owning at least 66 2/3% of outstanding Shares, or in certain other circumstances. On termination, the Trustee sells the gold and distributes the net proceeds pro rata after paying liabilities. The filing warns that such a liquidation could occur at a disadvantageous time, when gold prices are lower than when the investor bought, so proceeds could be less than expected.
What are the main custody risks for the gold backing these Shares?
All gold is held by HSBC in London under custody agreements that limit custodian liability to direct negligence, fraud, or willful default, capped at the market value of the gold at discovery. The Trust does not insure its gold, and the custodian's insurance does not cover the full amount. Gold held in unallocated form is not segregated from the custodian's assets, and the Trust has limited recourse against subcustodians, so a custodian insolvency or subcustodian failure could result in losses to Shareholders.
Does the Trust make distributions to shareholders, and can I vote on its management?
The Trust makes distributions only if cash exceeds anticipated expenses for the next 12 months by more than $0.01 per Share, or upon termination. The Trust holds no cash income-generating assets, so regular income is not expected. Shareholders have very limited voting rights: they may vote to remove the Trustee with 66 2/3% approval and approve certain amendments to the Trust Indenture, but they do not elect directors or manage the Trust.
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