10-QPeriod: Q3 FY2010

SPDR GOLD TRUST Quarterly Report for Q3 Ended Jun 30, 2010

Filed August 5, 2010For Securities:GLD

Summary

SPDR Gold Trust (GLD) reported its financial condition as of June 30, 2010, reflecting significant growth in its investment in gold compared to the prior year. The Trust's primary asset is gold bullion, which saw its cost value increase substantially from $28.5 billion to $37.5 billion, with a corresponding rise in market value to $52.6 billion. This growth is driven by consistent inflows of gold for share creations, outpacing redemptions and sales for expenses. Despite the increase in assets, the Trust's net gain from operations for the nine months ended June 30, 2010, was $520.8 million, a notable increase from the $122.7 million reported in the same period last year. This performance indicates a strong market for gold and investor confidence in GLD as an investment vehicle during the period. Investors should note that the Trust's financial statements highlight the direct correlation between the value of its shares and the price of gold. The Trust does not generate operational income and relies on selling gold to cover expenses, leading to a gradual decrease in the amount of gold represented by each share over time, irrespective of gold price movements. The report also details significant growth in outstanding shares, from 358.9 million in September 2009 to 433.9 million in June 2010, underscoring the Trust's increasing popularity. The market value of gold holdings significantly exceeded its cost, indicating a substantial unrealized gain, reflecting the strong appreciation of gold prices during the reporting period.

Financial Highlights

17 data points
Beta

Net Income

$19.16M

EPS (Diluted)

$0.05

Total Assets

$37.72B

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Gross Profit$11.89M
Operating Expenses$46.66M
Net Income$19.16M
EPS (Basic)$0.05
Shares Outstanding (Basic)400.50M

Key Highlights

  • 1Investment in gold, at cost, increased significantly from $28.5 billion (Sept 30, 2009) to $37.6 billion (June 30, 2010).
  • 2The market value of gold holdings stood at $52.6 billion as of June 30, 2010, substantially higher than its cost value, indicating a significant unrealized gain of $15.1 billion.
  • 3Total net gain from operations for the nine months ended June 30, 2010, was $520.8 million, a substantial increase from $122.7 million in the prior year period.
  • 4The Trust saw substantial growth in outstanding shares, increasing from 358.9 million (Sept 30, 2009) to 433.9 million (June 30, 2010).
  • 5Gold receivable increased from $39.1 million (Sept 30, 2009) to $170.3 million (June 30, 2010), reflecting ongoing creation activity.
  • 6Total expenses for the nine months ended June 30, 2010, were $125.5 million, an increase from $79.9 million in the prior year period, primarily due to higher custody, sponsor, and marketing fees.
  • 7The Trust holds gold at the lower of cost or market, with an unrealized gain on investment in gold of $15.1 billion as of June 30, 2010.

Frequently Asked Questions

The Trust's 'Investment in Gold, at cost' significantly increased from $28.5 billion as of September 30, 2009, to $37.6 billion as of June 30, 2010. The market value of these holdings also rose substantially, reaching $52.6 billion by June 30, 2010, indicating a large unrealized gain.

For the nine months ended June 30, 2010, the Trust reported a total gain on gold of $646.3 million and a net gain from operations of $520.8 million. This represents a significant improvement compared to the $202.6 million total gain on gold and $122.7 million net gain from operations for the same period in 2009.

The Trust's expenses, such as custody, trustee, sponsor, and marketing fees, are paid by selling the Trust's gold holdings. The financial statements show that the Trust had no net cash flow from operations as cash received from gold sales to pay expenses was equal to those expenses.

The 'Shareholders' Deficit' has increased substantially from $(6.6) million in September 2009 to $(15.1) million in June 2010. This is primarily due to an 'Adjustment of Redeemable Shares to redemption value' of $(9.0) million during the nine months ended June 30, 2010. It reflects the accounting treatment for redeemable shares where changes in their redemption value impact equity.