10-QPeriod: Q1 FY2010

ISHARES GOLD TRUST Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 7, 2010For Securities:IAU

Summary

The iShares COMEX Gold Trust (IAU) 10-Q filing for the quarter ended March 31, 2010, indicates a slight decrease in the Trust's total assets, primarily due to a net redemption of shares, despite an increase in the price of gold. The Trust holds physical gold bullion as its primary asset. Its objective is to reflect the price of gold, less expenses. The net asset value per share saw a modest increase, slightly underperforming the rise in gold prices due to the impact of sponsor fees. The financial statements show a decrease in gold bullion inventory from $1.91 billion to $1.87 billion. Net income for the quarter was $31.9 million, an increase from the prior year's $23.4 million, driven by gains on gold distributions for share redemptions and sales to cover expenses, offset by sponsor fees. The Trust continues to operate as a passive investment vehicle, with shares issued and redeemed in exchange for gold, not cash.

Financial Highlights

2 data points
Beta

Net Income

$31.94M

Financial Statements
Beta
Operating Expenses$2.75M
Net Income$31.94M

Key Highlights

  • 1Total assets decreased slightly to $1.87 billion as of March 31, 2010, down from $1.91 billion at year-end 2009.
  • 2Net income for the quarter ended March 31, 2010, was $31.9 million, an increase compared to $23.4 million for the same period in 2009.
  • 3The Trust experienced a net redemption of shares during the quarter, with 1,050,000 shares redeemed versus 300,000 shares issued.
  • 4The fair value of gold bullion held decreased to $2.75 billion from $2.79 billion.
  • 5Sponsor's fees amounted to $2.75 million for the quarter, representing the Trust's primary expense.
  • 6The net asset value per share increased from $107.39 at December 31, 2009, to $109.06 at March 31, 2010.
  • 7The Trust's gold holdings are valued using the COMEX Spot Settlement Price and are accounted for at the lower of cost or market.

Frequently Asked Questions

The primary asset held by the iShares COMEX Gold Trust (IAU) is physical gold bullion.

Shares of the Trust are created and redeemed only in exchange for gold bullion, not cash, in aggregations of 50,000 shares or multiples thereof. These transactions are conducted with registered broker-dealers known as Authorized Participants.

The main expense of the Trust is the Sponsor's fee, which accrues daily at an annualized rate of 0.40% of the adjusted daily net asset value.

The gold bullion held by the Trust is valued at the lower of cost or market, using the average cost method. The market value is based on the Commodity Exchange, Inc. (COMEX) settlement price for the spot month gold futures contract.