10-QPeriod: Q3 FY2019

ISHARES GOLD TRUST Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 6, 2019For Securities:IAU

Summary

This 10-Q filing for iShares Gold Trust (IAU) for the period ending September 29, 2019, indicates a significant increase in the Trust's net assets, driven by a rise in the price of gold and substantial inflows of new shares. The Trust's investment in gold bullion increased from $11.55 billion at the end of 2018 to $16.36 billion by the end of the third quarter of 2019. This growth was primarily fueled by strong investor demand, evidenced by the creation of over 312 million new shares during the nine-month period. The net asset value per share also saw a healthy increase, rising from $12.28 at the start of the year to $14.20 by September 30, 2019. The Trust's primary expense is the Sponsor's fee, which is set at an annualized rate of 0.25% of the net asset value. Despite this fee, the Trust's performance closely tracked the price of gold, with a 15.64% total return on net asset value for the first nine months of 2019. Investors should note that the Trust is a passive investment vehicle that holds physical gold bullion, and its performance is directly tied to the fluctuations in the price of gold.

Financial Highlights

8 data points
Beta

Net Income

$715.95M

EPS (Diluted)

$1.36

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Operating Expenses$9.39M
Operating Income-$9.39M
Net Income$715.95M
EPS (Basic)$1.36

Key Highlights

  • 1The Trust's net assets increased significantly by 41.65% from $11.54 billion at December 31, 2018, to $16.35 billion at September 30, 2019.
  • 2The net asset value (NAV) per Share increased from $12.28 at the beginning of the period to $14.20 at September 30, 2019.
  • 3There was substantial investor demand, with 312.5 million Shares created and 101.4 million Shares redeemed during the nine months ended September 30, 2019, resulting in a net increase of 211.1 million Shares outstanding.
  • 4The Trust's performance for the nine months ended September 30, 2019, was a total return of 15.64% based on net asset value, closely mirroring the appreciation in gold prices.
  • 5The primary expense for the Trust is the Sponsor's fee, representing 0.25% of the net asset value, totaling $24.6 million for the nine months.
  • 6The Trust's investment consists solely of gold bullion, valued at $16.36 billion as of September 30, 2019, with a cost of $14.23 billion, reflecting significant unrealized appreciation.
  • 7Gold bullion is valued using the LBMA Gold Price PM, a Level 1 fair value input, indicating it is priced based on unadjusted quoted prices in active markets.

Frequently Asked Questions

The iShares Gold Trust's primary and sole asset is physical gold bullion, held by a custodian. The Trust is designed to reflect the performance of the price of gold.

The Trust generates returns for investors by holding physical gold bullion. Its performance is directly tied to the fluctuations in the market price of gold. The Trust does not actively trade or engage in strategies to profit from price changes; it passively reflects the price movement of gold.

The primary expense is the Sponsor's fee, which accrues daily at an annualized rate of 0.25% of the Trust's net asset value. Other administrative expenses are generally covered by the Sponsor, as disclosed in the filing.

Individual investors can buy or sell shares of IAU on the NYSE Arca stock exchange through a broker-dealer. However, the creation and redemption of shares by Authorized Participants with the Trust itself are done in large blocks (Baskets) in exchange for physical gold bullion, not cash.