10-KPeriod: FY2018

ISHARES GOLD TRUST Annual Report, Year Ended Dec 31, 2018

Filed February 28, 2019For Securities:IAU

Summary

ISHARES GOLD TRUST (IAU) filed its 2018 annual report on Form 10-K on February 27, 2019. The Trust's primary objective is to reflect the performance of the price of gold, holding physical gold bullion as its main asset. As of December 31, 2018, the Trust's net asset value (NAV) was $11.54 billion, an increase from $10.15 billion at the end of 2017, reflecting a growing investor interest and a favorable market for gold during the period. The Trust's operations are passive, meaning it does not actively manage its gold holdings for profit. Instead, it issues and redeems shares (in Baskets of 50,000 shares) in exchange for physical gold with Authorized Participants. The Sponsor, iShares Delaware Trust Sponsor LLC (an indirect subsidiary of BlackRock), covers most of the Trust's operational expenses in exchange for an annual fee of 0.25% of the NAV. For 2018, the Sponsor's fee amounted to $27.53 million.

Financial Highlights

8 data points
Beta

Net Income

-$198.12M

EPS (Diluted)

$-0.44

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Operating Expenses$27.53M
Operating Income-$27.53M
Net Income-$198.12M
EPS (Basic)$-0.44

Key Highlights

  • 1The Trust's net asset value (NAV) increased by 13.77% to $11.54 billion by the end of 2018, up from $10.15 billion in 2017, indicating strong performance and investor demand for gold.
  • 2Outstanding shares increased from 814.9 million in 2017 to 940.2 million in 2018, reflecting net creation of 247 million shares.
  • 3The Sponsor's fee was 0.25% of NAV, totaling $27.53 million for the year ended December 31, 2018.
  • 4The Trust is a passive investment vehicle, aiming to mirror the price of gold, with no active management or trading strategies employed.
  • 5The Trust's operations are primarily managed by the Sponsor (iShares Delaware Trust Sponsor LLC) and the Trustee (The Bank of New York Mellon), with gold held by the Custodian (JPMorgan Chase Bank N.A.).
  • 6Shares are traded on NYSE Arca under the ticker symbol IAU, providing liquidity for investors.
  • 7The Trust is structured as a grantor trust for U.S. federal income tax purposes, meaning it is not subject to U.S. federal income tax itself; income and expenses flow through to shareholders.

Frequently Asked Questions

The primary purpose of the iShares Gold Trust (IAU) is to reflect the performance of the price of gold. It achieves this by holding physical gold bullion as its primary asset. Investors can gain exposure to gold prices through the purchase of IAU shares.

IAU's returns are directly linked to the fluctuations in the market price of gold. The Trust holds physical gold, and the value of its shares is intended to mirror the value of this gold, less any accrued expenses. It does not engage in active trading or futures contracts to generate returns.

The primary ongoing expense is the Sponsor's fee, which is set at an annualized rate of 0.25% of the Trust's net asset value. While the Sponsor covers many administrative costs, other potential expenses like taxes or legal fees not covered by the Sponsor are paid from the Trust's assets, necessitating the sale of gold.

The Net Asset Value (NAV) per share is calculated daily by the Trustee. It is determined by valuing the Trust's gold holdings using the LBMA Gold Price PM (or LBMA Gold Price AM if PM is unavailable), subtracting all accrued expenses and liabilities, and then dividing the result by the number of outstanding shares. Shares trade on NYSE Arca, and their market price may differ slightly from the NAV due to supply and demand dynamics.