10-QPeriod: Q3 FY2009

ISHARES GOLD TRUST Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 6, 2009For Securities:IAU

Summary

The iShares® COMEX® Gold Trust (IAU) reported significant growth in its net asset value (NAV) for the nine months ended September 30, 2009, driven by an increase in the price of gold. The Trust's NAV grew by approximately 27.57% from December 31, 2008, to September 30, 2009, largely due to a 14.08% rise in the COMEX Spot Settlement Price of gold. During this period, the Trust saw an increase in outstanding shares, reflecting net creations of shares, indicating investor demand for gold exposure. Despite overall NAV growth, the Trust experienced a net loss for the three months ended September 30, 2009, primarily due to Sponsor's fees which outpaced the gains from gold sales. The underlying value of the Trust's assets, represented by gold bullion, increased substantially, but the operational costs, mainly Sponsor's fees, impacted short-term profitability. Investors should note the Trust's passive nature; its value directly tracks gold prices, and it does not aim to generate profits beyond mirroring gold's performance, less expenses.

Financial Highlights

4 data points
Beta

Net Income

-$1.71M

Cash & Equivalents

$0.00

Financial Statements
Beta
Operating Expenses$2.28M
Net Income-$1.71M

Key Highlights

  • 1Net Asset Value (NAV) increased by 27.57% from $1.896 billion at the end of 2008 to $2.419 billion by September 30, 2009.
  • 2The price of gold, as measured by the COMEX Spot Settlement Price, rose by 14.08% during the first nine months of 2009.
  • 3The Trust experienced a net loss of $1.7 million for the three months ended September 30, 2009, primarily due to $2.28 million in Sponsor's fees.
  • 4For the nine months ended September 30, 2009, the Trust generated a net income of $20.16 million.
  • 5Outstanding shares increased by approximately 12% during the nine-month period, indicating net creation of shares (more creations than redemptions).
  • 6The fair value of gold bullion inventory stood at $2.42 billion as of September 30, 2009, an increase from $1.90 billion at December 31, 2008.
  • 7The Trust is subject to concentration risk as its assets consist almost entirely of gold bullion.

Frequently Asked Questions

The primary driver of the iShares COMEX Gold Trust's value is the price of gold bullion held by the Trust. The Trust's objective is for the value of its shares to reflect the price of gold, less expenses and liabilities.

The main ongoing expense for the Trust is the Sponsor's fee, which accrues daily at an annualized rate of 0.40% of the Trust's adjusted daily net asset value. Other administrative expenses like Trustee's fees, Custodian's fees, and listing fees are assumed by the Sponsor.

Individual investors typically buy and sell shares of the iShares COMEX Gold Trust on a stock exchange (NYSE Arca, symbol IAU) through a brokerage account. The Trust itself issues and redeems shares only in large blocks (Baskets) in exchange for physical gold bullion with Authorized Participants, not individual investors.

The Trust disclosed that Barclays PLC, the ultimate parent of the Sponsor, agreed to sell its interests in the Sponsor to BlackRock, Inc. It was stated that this transaction was not expected to materially affect the Trust, its shareholders, or an investment in its shares.