10-QPeriod: Q3 FY2011

ISHARES GOLD TRUST Quarterly Report for Q3 Ended Sep 30, 2011

Filed November 8, 2011For Securities:IAU

Summary

The iShares Gold Trust (IAU) 10-Q filing for the period ending September 30, 2011, reveals significant growth in the Trust's net asset value, primarily driven by a substantial increase in the price of gold and a corresponding rise in outstanding Shares. The Trust's objective is to track the price of gold, and during this quarter, it successfully reflected this trend, with its Net Asset Value (NAV) per Share increasing by approximately 7.55% in the third quarter of 2011. For the first nine months of 2011, the Trust experienced an even more robust increase in NAV per Share, growing by about 15.07%, mirroring the strong performance of gold. The Trust's financial performance was largely influenced by the gains on gold distributed for Share redemptions, offset by sponsor fees. Investors should note that the Trust is a passive vehicle and its performance is directly tied to the spot price of gold, with a 0.25% annual sponsor fee impacting returns.

Financial Highlights

7 data points
Beta

Net Income

$116.72M

EPS (Diluted)

$0.44

Total Assets

$6.13B

Financial Statements
Beta
Operating Expenses$5.54M
Net Income$116.72M
EPS (Basic)$0.44
Shares Outstanding (Basic)264.70M

Key Highlights

  • 1The Trust's net asset value (NAV) per Share increased by 7.55% during the third quarter of 2011, rising from $14.70 to $15.81.
  • 2For the first nine months of 2011, the NAV per Share grew by 15.07%, from $13.74 at the start of the year to $15.81 at the end of the third quarter.
  • 3The Trust experienced significant creation of Shares, with 86.85 million Shares created in Q3 2011 and 208.25 million Shares created in the first nine months of 2011.
  • 4Gold bullion inventory, valued at fair value, increased significantly from $3.55 billion at the end of 2010 to $8.53 billion by September 30, 2011.
  • 5Net income for the nine months ended September 30, 2011, was $241.2 million, a substantial increase from $34.3 million in the same period of 2010.
  • 6Sponsor's fees represented the primary expense, totaling $5.54 million for the third quarter and $12.89 million for the first nine months of 2011.
  • 7The Trust's primary asset is gold bullion, creating a concentration risk directly tied to fluctuations in the price of gold.

Frequently Asked Questions

The primary driver of the iShares Gold Trust's performance is the spot price of gold bullion. The Trust is designed to track the price of gold, less its expenses.

Shares are created and redeemed only in aggregations of 50,000 Shares (a "Basket") and are exchanged for physical gold bullion, not cash. This process is conducted exclusively through "Authorized Participants," which are registered broker-dealers that have entered into agreements with the Trust.

The main expense is the Sponsor's fee, which accrues daily at an annualized rate of 0.25% of the adjusted net asset value of the Trust. Other administrative and operating expenses are typically assumed by the Sponsor.

The gold bullion held by the Trust is valued daily using the price fixed by the London Gold Market Fixing Ltd. in the afternoon (London time), known as the "London PM Fix."