10-QPeriod: Q1 FY2014

ISHARES GOLD TRUST Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 12, 2014For Securities:IAU

Summary

The iShares Gold Trust (IAU) reported a net asset value (NAV) of $6.86 billion as of March 31, 2014, representing a 9.38% increase from the prior quarter. This growth was primarily driven by a 7.51% rise in the price of gold, as reflected by the London PM Fix. The Trust experienced an increase in outstanding Shares, with 16 million Shares created and 6.3 million redeemed during the quarter. Operationally, the Trust benefited from significant unrealized appreciation on its gold bullion holdings, contributing to a net income of $463.3 million for the quarter. Expenses were minimal, mainly consisting of sponsor fees, which amounted to $4.18 million. Notably, effective January 1, 2014, the Trust adopted investment company accounting standards, leading to changes in how gold bullion is valued and how Shareholder's equity is presented.

Financial Highlights

14 data points
Beta

Net Income

$463.32M

EPS (Diluted)

$1.70

Total Assets

$6.86B

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Operating Expenses$4.18M
Operating Income-$4.18M
Net Income$463.32M
EPS (Basic)$1.70
Shares Outstanding (Basic)271.00M

Key Highlights

  • 1Net Asset Value (NAV) increased by 9.38% to $6.86 billion by the end of Q1 2014.
  • 2The increase in NAV was primarily driven by a 7.51% rise in the London PM Fix price of gold.
  • 3The Trust reported a net income of $463.3 million for the quarter ended March 31, 2014, largely due to unrealized appreciation on gold bullion.
  • 4Total expenses for the quarter were minimal, primarily consisting of sponsor fees totaling $4.18 million.
  • 5The Trust adopted investment company accounting standards effective January 1, 2014, changing the valuation of gold bullion to fair value and reclassifying shares.
  • 6Shares outstanding increased from 538 million at the end of 2013 to 547.7 million at the end of Q1 2014.
  • 7The Trust's primary asset is gold bullion, representing 100.02% of its net asset value, indicating significant concentration risk.

Frequently Asked Questions

The iShares Gold Trust (IAU) saw its Net Asset Value (NAV) grow by 9.38% to $6.86 billion by March 31, 2014. This growth was mainly due to an increase in the price of gold, reflected in the London PM Fix, which rose by 7.51% during the quarter. The Trust reported a net income of $463.3 million, primarily driven by unrealized gains on its gold holdings.

The primary expense for the iShares Gold Trust is the Sponsor's fee, which accrues daily at an annualized rate of 0.25% of the net asset value. For the quarter ended March 31, 2014, these fees amounted to approximately $4.18 million. The Sponsor also agreed to assume other administrative and marketing expenses.

Yes, effective January 1, 2014, the Trust adopted investment company accounting standards (FASB ASC Topic 946). This change resulted in gold bullion being valued at fair value (instead of lower of cost or market), the recognition of unrealized appreciation/depreciation on the income statement, and the reclassification of redeemable capital shares into shareholders' equity.

The primary risk associated with the iShares Gold Trust is concentration risk. The Trust's assets consist almost entirely of gold bullion (100.02% of NAV). Therefore, any significant decline in the price of gold would have a material adverse effect on the value of the Trust's Shares.