10-QPeriod: Q3 FY2017

ISHARES GOLD TRUST Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 7, 2017For Securities:IAU

Summary

For the nine months ended September 30, 2017, iShares Gold Trust (IAU) reported a significant increase in net assets, growing by approximately 29% from $7.31 billion to $9.43 billion. This growth was driven by a substantial increase in the Trust's net asset value (NAV) per share, which rose by 10.70% in conjunction with a corresponding increase in the price of gold. The Trust experienced substantial inflows of capital through the creation of new shares, indicating strong investor demand for gold exposure. Despite a net investment loss due to ongoing operational expenses, the overall gains from the appreciation of gold bullion significantly outweighed these costs, resulting in positive returns for investors. The Trust's financial position remains robust, primarily holding gold bullion valued at fair market prices.

Financial Highlights

8 data points
Beta

Net Income

$267.22M

EPS (Diluted)

$0.74

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Operating Expenses$5.57M
Operating Income-$5.57M
Net Income$267.22M
EPS (Basic)$0.74

Key Highlights

  • 1The Trust's Net Asset Value (NAV) increased by 28.96% to $9.43 billion for the nine months ended September 30, 2017, up from $7.31 billion at the end of 2016.
  • 2NAV per Share grew from $11.16 at the beginning of the period to $12.33 at the end of the period, reflecting the rise in gold prices.
  • 3Significant capital inflows were observed, with 170 million Shares created and 60.55 million Shares redeemed during the nine-month period, leading to a net increase of 109.45 million Shares outstanding.
  • 4The primary asset of the Trust is gold bullion, valued at $9.43 billion as of September 30, 2017, representing an increase from $7.31 billion at December 31, 2016.
  • 5The Trust experienced a net investment loss of $15.51 million for the nine months ended September 30, 2017, primarily due to Sponsor's fees (0.25% of NAV).
  • 6Despite the net investment loss, the Trust achieved a substantial net increase in net assets from operations of $780.64 million, driven by unrealized gains from the appreciation of gold bullion.
  • 7The Trust's investment in gold bullion is valued using the LBMA Gold Price PM, categorized as a Level 1 asset in the fair value hierarchy, indicating direct valuation from active market prices.

Frequently Asked Questions

The primary driver of the Trust's performance was the appreciation in the price of gold. The Trust's net asset value and NAV per share increased in line with the rising gold prices, significantly contributing to the overall gains despite ongoing operational expenses.

The iShares Gold Trust is designed to reflect the performance of the price of gold. Its returns are generated by holding physical gold bullion, and the value of investors' shares fluctuates with the market price of gold. The Trust experiences gains or losses based on the change in the fair value of the gold it holds, net of expenses.

The Sponsor's fee is an annual fee of 0.25% of the Trust's net asset value, paid monthly. This fee is the primary operational expense of the Trust. While it results in a net investment loss for the Trust, its impact on the overall return is relatively small compared to the potential gains or losses from gold price movements.

The Trust's primary asset, gold bullion, is valued at fair value using the LBMA Gold Price PM. This is considered a Level 1 input in the fair value hierarchy, meaning it's based on unadjusted quoted prices in active markets for identical assets. This provides investors with a transparent and market-based valuation of their investment.