10-QPeriod: Q1 FY2020

ISHARES GOLD TRUST Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 7, 2020For Securities:IAU

Summary

The iShares Gold Trust (IAU) reported a significant increase in net assets for the first quarter of 2020, ending March 31, 2020, with net assets reaching $20.22 billion, up from $17.63 billion at the end of 2019. This growth was driven by a substantial increase in the price of gold, which rose by 5.64% during the quarter, and a net increase in outstanding Shares due to new Share creations exceeding redemptions. The Trust's Net Asset Value (NAV) per Share also increased to $15.37 from $14.56. The Trust's primary asset is gold bullion, valued at $20.23 billion at quarter-end, reflecting the strong performance of gold prices during this period, which was influenced by broader economic uncertainties and the onset of the COVID-19 pandemic. Operationally, the Trust generated a net increase in net assets of $970.84 million, primarily from a significant unrealized gain on its gold bullion holdings ($831 million) and realized gains from Share redemptions and expense payments. Sponsor's fees, the Trust's main expense, amounted to $11.82 million for the quarter. The Trust highlighted the concentration risk due to its sole investment in gold bullion and noted the potential impact of public health emergencies like COVID-19 on its operations and the gold market.

Financial Highlights

8 data points
Beta

Net Income

$970.84M

EPS (Diluted)

$1.54

Cash & Equivalents

$0.00

Free Cash Flow

$0.00

Financial Statements
Beta
Operating Expenses$11.82M
Operating Income-$11.82M
Net Income$970.84M
EPS (Basic)$1.54

Key Highlights

  • 1Net assets of the iShares Gold Trust (IAU) increased by 14.72% to $20.22 billion as of March 31, 2020, up from $17.63 billion on December 31, 2019.
  • 2The Net Asset Value (NAV) per Share rose to $15.37 at the end of the quarter, compared to $14.56 at the end of the prior year.
  • 3The price of gold increased by 5.64% during the quarter, contributing significantly to the Trust's performance.
  • 4There was a net increase in outstanding Shares, with 171.4 million Shares created versus 66.55 million Shares redeemed.
  • 5The Trust reported a net increase in net assets from operations of $970.84 million for the quarter, driven largely by unrealized appreciation of gold bullion.
  • 6The Trust's primary asset is gold bullion, valued at $20.23 billion, representing a concentration risk tied to gold price fluctuations.
  • 7Sponsor's fees were the main expense, totaling $11.82 million for the three months ended March 31, 2020.

Frequently Asked Questions

The primary driver of IAU's performance is the price of gold bullion. The Trust holds a significant amount of physical gold, and its Net Asset Value (NAV) directly reflects the fluctuations in the market price of gold.

The iShares Gold Trust's main 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 and marketing expenses are generally assumed by the Sponsor.

The Trust noted that public health emergencies like COVID-19 can negatively impact the global economy and gold markets. Potential impacts include disruptions to gold supply chains, operations of mines and refiners, transportation of gold, and volatility in financial markets, which could affect the Trust's operations and the value of its Shares.

Shares are issued and redeemed by the Trust in large aggregations (Baskets) of 50,000 Shares. This process involves exchanging physical gold bullion for Shares (creation) or gold bullion for redeemed Shares. Individual investors typically buy and sell Shares on secondary markets like NYSE Arca.