10-KPeriod: FY2019

ISHARES GOLD TRUST Annual Report, Year Ended Dec 31, 2019

Filed February 27, 2020For Securities:IAU

Summary

iShares Gold Trust (IAU) reported a significant increase in its Net Asset Value (NAV) for the fiscal year ended December 31, 2019, growing by 52.70% to $17.63 billion. This growth was driven by both an increase in outstanding shares and a 18.83% rise in the LBMA Gold Price AM. The Trust's objective is to mirror the performance of gold prices, and it achieved this by holding physical gold bullion. The Sponsor, iShares Delaware Trust Sponsor LLC (an indirect subsidiary of BlackRock), continues to manage administrative expenses, with its fee representing the primary ongoing cost for the Trust. For investors, IAU offers a straightforward way to gain exposure to gold prices without the complexities of direct physical ownership. However, the value of IAU shares is directly tied to the fluctuating price of gold, presenting potential for both gains and losses. The Trust's passive nature means it does not actively manage its assets to profit from market movements. Investors should be aware of the ongoing Sponsor's fee of 0.25% and the inherent risks associated with gold price volatility, including the potential for its value to decrease due to market factors, governmental decisions, or operational risks within the Trust's infrastructure.

Financial Highlights

8 data points
Beta

Net Income

$2.28B

EPS (Diluted)

$4.30

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Operating Expenses$35.32M
Operating Income-$35.32M
Net Income$2.28B
EPS (Basic)$4.30

Key Highlights

  • 1The iShares Gold Trust (IAU) experienced a substantial increase in Net Asset Value (NAV) of 52.70% for the year ended December 31, 2019, reaching $17.63 billion.
  • 2The Trust's performance closely tracked the price of gold, with the LBMA Gold Price AM increasing by 18.83% over the same period.
  • 3Outstanding shares increased from 940.2 million at the end of 2018 to 1.21 billion by the end of 2019, indicating investor demand.
  • 4The Sponsor's fee remains the primary expense, set at an annualized rate of 0.25% of the Trust's net asset value.
  • 5IAU shares are listed on NYSE Arca under the ticker symbol IAU, providing liquidity for investors.
  • 6The Trust is a passive investment vehicle designed to reflect the price of gold, not to generate active trading profits.
  • 7Investors should be aware of the risks associated with gold price volatility and the potential for value depreciation.

Frequently Asked Questions

The primary objective of the iShares Gold Trust (IAU) is to reflect generally the performance of the price of gold, before payment of the Trust's expenses and liabilities. It aims to provide investors with a cost-effective and accessible way to invest in gold.

The primary ongoing expense for IAU is the Sponsor's fee, which is accrued daily at an annualized rate of 0.25% of the Trust's net asset value. Other potential expenses include those not assumed by the Sponsor, such as taxes and legal fees exceeding $100,000 per annum.

The NAV of IAU is calculated daily by the Trustee. It involves valuing the gold held by the Trust using the LBMA Gold Price PM, subtracting all accrued fees, expenses, and liabilities, and then dividing the result by the number of outstanding Shares.

The primary risks for IAU investors stem from the inherent volatility of gold prices, which directly impacts the value of the Shares. Other risks include the continuous decrease in the amount of gold represented by each Share due to expenses (which requires gold price increases to maintain value), potential market price deviations from NAV, and operational risks related to the Trust's infrastructure and service providers.