Summary
The iShares Gold Trust (IAU), as detailed in its March 31, 2006, 10-K filing, was established on January 21, 2005, to provide investors with a cost-effective and accessible way to invest in gold. The trust's primary objective is for the iShares' value to reflect the price of gold owned by the trust, less expenses and liabilities. Assets consist primarily of physical gold held by a custodian, with iShares representing a fractional beneficial interest. For the period ending December 31, 2005, the trust experienced significant growth, with net assets increasing from $6.4 million at inception to $368.3 million. Outstanding shares also grew substantially. The trust operates passively, meaning it does not actively manage its gold holdings to profit from market movements. Its activities are limited to issuing iShares for gold deposits, selling gold to cover expenses, and delivering gold for iShare redemptions. The sponsor, Barclays Global Investors, N.A., assumes most administrative and marketing expenses, offset by a sponsor's fee. Investors should be aware that iShares' value is directly tied to gold prices, which are inherently volatile, and that ongoing expenses will gradually decrease the amount of gold represented per share.
Key Highlights
- 1The iShares Gold Trust (IAU) was formed to offer investors direct exposure to gold prices through tradable shares.
- 2As of December 31, 2005, the trust's net assets grew to $368.3 million from $6.4 million at inception.
- 3The trust is a passive investment vehicle, aiming to track the price of gold, less expenses.
- 4iShares are backed by physical gold held by The Bank of Nova Scotia on behalf of the trust.
- 5The sponsor, Barclays Global Investors, covers most trust expenses in exchange for a sponsor's fee (0.40% of NAV).
- 6iShares are listed and trade on the AMEX under the symbol 'IAU'.
- 7The trust's Net Asset Value (NAV) is calculated daily based on the COMEX spot settlement price of gold.