What is the primary objective of the iShares Gold Trust (IAU)?

The primary objective of the iShares Gold Trust (IAU) is for the value of its shares (iShares) to reflect, at any given time, the price of the gold owned by the trust, less the trust's expenses and liabilities. It aims to provide investors with a simple and cost-effective way to invest in gold without the logistical challenges of holding physical gold.

How is the value of IAU shares determined?

The Net Asset Value (NAV) per share of IAU is determined daily by valuing the trust's gold holdings based on the COMEX settlement price for the spot month gold futures contract. From this total value, accrued fees, expenses, and liabilities are subtracted. This adjusted net asset value is then divided by the number of outstanding iShares.

What are the main expenses incurred by the iShares Gold Trust?

The primary ordinary recurring expense of the iShares Gold Trust is the sponsor's fee, which is accrued daily at an annualized rate of 0.40% of the trust's net asset value. The sponsor also assumes certain administrative and marketing expenses, such as trustee fees, custodian fees, listing fees, and audit fees. Expenses not assumed by the sponsor, such as certain taxes or legal fees exceeding $100,000 annually, are paid from the trust's assets, typically through the sale of gold.

How does an investor gain exposure to gold through IAU?

Investors gain exposure to gold by purchasing iShares (IAU) on the AMEX, similar to buying stocks. These shares represent a beneficial interest in the trust's holdings of physical gold. The value of the iShares fluctuates with the market price of gold, less trust expenses.

IAU 10-K FY2007 Annual Report — Revenue, Net Income, EPS

Summary

The iShares Gold Trust (IAU), as reported in its February 26, 2008, 10-K filing for the period ending December 31, 2007, offers investors a passive investment vehicle designed to track the price of gold. The trust's primary assets consist of physical gold held by a custodian, with each iShare representing a beneficial interest in these net assets. The trust's objective is for the iShares' value to reflect the price of gold held, less trust expenses and liabilities, providing a cost-effective and accessible way for investors to gain exposure to the gold market without the complexities of holding physical gold. During fiscal year 2007, the trust experienced significant growth, with net assets increasing from $907,668,832 to $1,481,289,446, and outstanding shares rising from 14,400,000 to 17,950,000. This growth was driven by an increase in the price of gold, which rose approximately 31.44% based on the COMEX Spot Settlement Price. Despite the overall asset growth, the trust reported a net loss of $507,145 for the year, primarily due to sponsor's fees of $4,276,778, which are paid by selling trust assets.

Key Highlights

1The iShares Gold Trust (IAU) aims to provide investors with exposure to the price of gold, holding physical gold as its primary asset.

2Net assets grew significantly by 63.20% in 2007, from $907.7 million to $1.48 billion, reflecting a strong increase in gold prices.

3Outstanding shares increased from 14.4 million to 17.95 million during 2007, indicating strong investor demand for gold exposure through IAU.

4The net asset value (NAV) per share increased by 30.93% in 2007, closely tracking the COMEX Spot Settlement Price for gold.

5The trust incurred a net loss of $507,145 in 2007, largely due to sponsor's fees of $4.28 million, which are paid through the sale of trust assets.

6The trust operates as a passive investment vehicle, with its value directly linked to the fluctuations in the price of gold.

7iShares are listed and trade on the AMEX under the symbol "IAU", offering liquidity for investors.

ISHARES GOLD TRUST Annual Report, Year Ended Dec 31, 2007

Summary

Key Highlights

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