01—Abstract
Summary
Summary of the 10-K filed February 26, 2010. Cited figures are marked; the original filing is the authoritative source.
The iShares Gold Trust (IAU), as of December 31, 2009, reported total assets of approximately $1.91 billiona, a significant increase from the previous year, reflecting the growing investor interest in gold as an asset class.
The Trust's objective is to provide investors with a cost-effective and accessible way to invest in physical gold, with its shares designed to track the price of gold less the Trust's expenses. During 2009, the Trust saw substantial growth in both its net asset value and outstanding shares, driven by a rise in the COMEX Spot Settlement Price for gold and increased creation of new shares by Authorized Participants. The Trust operates as a passive investment vehicle, holding physical gold with its value primarily determined by the COMEX settlement price.
While the Sponsor, BlackRock Asset Management International Inc., assumes many administrative costs, a nominal sponsor's fee is charged, necessitating the sale of small amounts of gold to cover these expenses. This ongoing expense management, coupled with gold price volatility and potential market trading discrepancies, presents key considerations for investors.
02—Key points
Key Highlights
- The iShares Gold Trust (IAU) experienced significant growth in 2009, with net assets increasing by 47.25% to $2.79 billion and outstanding shares rising to 26 million.
- The Trust's Net Asset Value (NAV) per share increased by 23.45% in 2009, closely tracking the COMEX gold price increase of 23.95%.
- The Trust is a passive investment vehicle whose primary asset is physical gold, aiming to reflect the price of gold, less expenses.
- Gold bullion is valued daily using the COMEX settlement price for the spot month gold futures contract.
- The Sponsor, BlackRock Asset Management International Inc., charges an annual fee of 0.40% of the Trust's net asset value, which is paid by selling small amounts of gold.
- Shares of the Trust trade on NYSE Arca under the ticker symbol 'IAU'.
- The Trust operates as a grantor trust for U.S. federal income tax purposes, meaning income and expenses flow through to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 26, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Operating Expenses | $9.10M$6.96M | +30.6% |
| Net Income | $60.97M$75.28M | −19.0% |
05—Questions
Frequently Asked Questions
What is the primary objective of the iShares Gold Trust (IAU)?
The primary objective of the iShares Gold Trust (IAU) is to provide investors with a cost-effective and accessible way to gain exposure to the price performance of gold. The value of each iShare is intended to reflect the price of the gold held by the Trust, minus the Trust's expenses and liabilities.
How is the value of the iShares Gold Trust (IAU) determined?
The Net Asset Value (NAV) of the iShares Gold Trust (IAU) is determined daily by valuing the gold held by the Trust based on the COMEX settlement price for the spot month gold futures contract. This value is then adjusted for accrued fees, expenses, and liabilities.
What are the main expenses associated with holding IAU?
The main recurring expense for IAU is the Sponsor's fee, which is accrued daily at an annualized rate of 0.40% of the Trust's net asset value. This fee is paid by selling small amounts of the Trust's gold holdings. Other potential expenses include taxes, governmental charges, and costs associated with protecting the Trust's interests, though many administrative costs are assumed by the Sponsor.
How does an investor gain or lose money with IAU?
Investors gain or lose money with IAU based on the fluctuations in the price of gold. If the price of gold increases, the value of IAU generally increases, and vice versa. Additionally, the ongoing expenses (Sponsor's fee) reduce the amount of gold represented by each share over time, meaning the price of gold must increase sufficiently to offset these costs for investors to profit.
06—Continue