Summary
iShares Gold Trust (IAU) reported its annual results for the fiscal year ending December 31, 2016. The Trust's primary objective is to reflect the performance of the price of gold, holding physical gold bullion as its primary asset. During 2016, the Trust experienced significant growth in its net asset value, increasing by 40.31% from $5,209,802,846 to $7,310,131,020. This growth was driven by both an increase in the number of outstanding Shares and a rise in the price of gold. Key operational aspects include the Trust's passive investment strategy, which means it does not actively manage its gold holdings to profit from price changes. Expenses, primarily the Sponsor's fee (0.25% of net asset value), are covered by selling gold. Despite the overall positive net asset value growth, the report highlights various risks inherent in investing in gold, including price volatility, potential disruptions in gold pricing benchmarks, and operational risks associated with the custody and valuation of gold. The Trust's structure as a grantor trust means that income and expenses flow through to shareholders for tax purposes.
Financial Highlights
8 data points| Operating Expenses | $20.31M |
| Operating Income | -$20.31M |
| Net Income | $308.74M |
| EPS (Basic) | $0.92 |
Key Highlights
- 1The Trust's net asset value (NAV) increased by 40.31% in 2016, reaching $7,310,131,020, up from $5,209,802,846 at the end of 2015.
- 2The number of outstanding Shares grew significantly from 508,100,000 at the end of 2015 to 655,000,000 at the end of 2016, indicating increased investor demand.
- 3The Trust aims to mirror the price of gold, and its NAV performance was closely aligned with the 9.12% increase in gold prices during 2016.
- 4The primary recurring expense is the Sponsor's fee, which was $20,312,154 in 2016, representing an annualized rate of 0.25% of the Trust's average assets.
- 5The Trust is a grantor trust for tax purposes, meaning its income and expenses are passed through to shareholders.
- 6Significant risks are highlighted, including the potential for losses due to gold price volatility, reliance on the LBMA Gold Price PM benchmark, and the continuous decrease in the amount of gold represented by each share due to expense accrual.
- 7The Trust experienced an inadvertent issuance of 'Excess Shares' in early 2016, which carried potential rescission rights for purchasers, although this was addressed by a subsequent registration statement.