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The SPDR Gold ETF (NYSE:GLD) Surges To Over 50 Billion In Assets

 June 30, 2010 01:48 AM
 


State Street Global Advisors, the investment management business of State Street Corporation (NYSE: STT) and World Gold Trust Services, LLC, a wholly-owned subsidiary of the World Gold Council (WGC), today announced that assets in the SPDR® Gold Trust (NYSE: GLD) have surpassed US $50 billion. 

"(NYSE:GLD is increasingly being used as part of a long-term diversification investment strategy within investors' portfolios in a variety of market cycles currently playing out worldwide." 

[Related -Gold hasn’t lost its allure in my portfolio]

"With assets having increased by approximately 32 percent year-to-date (as of Friday, June 25, 2010)¹, SPDR Gold Shares has radically transformed the way in which a wide range of investors access the gold market," said James Ross, senior managing director at State Street Global Advisors. "GLD is increasingly being used as part of a long-term diversification investment strategy within investors' portfolios in a variety of market cycles currently playing out worldwide." 

Jason Toussaint, managing director, Investments, World Gold Trust Services, LLC commented: "Strategic asset allocation will continue to play a central role in investors' portfolio performance moving forward, and portfolios that contain even a small allocation in gold have the potential to better cope with varying market scenarios. This milestone for GLD underscores that investors have embraced gold as a viable core holding over the long-term." 

[Related -SPDR Gold Trust (ETF) (GLD): Has Gold Entered a New Bull Market?]

SPDR Gold Shares (NYSE:GLD) was launched in November 2004 by World Gold Trust Services and State Street to satisfy the growing need among investors for an exchange traded fund backed by physical gold. Recognizing that gold is a long-term investment which may stabilize wealth by mitigating the risk of falls in other asset classes, investors in GLD have made it one of the fastest growing ETFs globally. As of June 25, 2010, assets under management in the trust totaled more than $53 billion, making it the second largest ETF by assets in the world². 

(NYSE:GLD) is also cross-listed on the Bolsa Mexicana de Valores, the Singapore Exchange the Tokyo Stock Exchange and the Stock Exchange of Hong Kong. 

State Street Global Advisors is one of the largest ETF providers globally with assets under management for SPDR ETFs totaling more than $204 billion as of March 31, 2010.³ 

About World Gold Trust Services, LLC. 

World Gold Trust Services, LLC is a wholly owned subsidiary of the World Gold Council. World Gold Council's mission is to stimulate and sustain the demand for gold and to create enduring value for its stakeholders. It is funded by the world's leading gold mining companies. For further information visit www.gold.org 

About State Street Global Advisors 

State Street Global Advisors, the investment management business of State Street Corporation (NYSE: STT), delivers investment strategies and integrated solutions to clients worldwide across every asset class, investment approach and style. With $1.9 trillion in assets under management at March 31, 2010, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Montreal, Paris, Singapore, Sydney, Tokyo, Toronto, and Zurich and offices in 27 cities worldwide. For more information, visit State Street Global Advisors at www.ssga.com. 

¹ SSgA's Intermediary Business Group – Strategy & Research 

² SSgA's Intermediary Business Group – Strategy & Research 

³ SSgA's Intermediary Business Group – Strategy & Research 

Shares (the "Shares") of the SPDR® Gold Trust (the "Trust") trade like stocks, are subject to investment risk and will fluctuate in market value. The value of the Shares relates directly to the value of the gold held by the Trust (less Trust expenses) and fluctuations in the price of gold could materially adversely affect an investment in the Shares. Investors should be aware that there is no assurance that gold will maintain its long-term value in terms of purchasing power in the future. The Trust does not generate any income and as the Trust regularly sells gold to pay for its ongoing expenses, the amount of gold represented by each Share will decline over time. 

The Trust has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Trust has filed with the SEC for more complete information about the Trust and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Trust or any Authorized Participant will arrange to send you the prospectus if you request it by calling 1-866-320-4053 or contacting State Street Global Markets, LLC, One Lincoln Street, Attn: SPDR Gold Shares, 30th Floor, Boston, MA 02111. 

The prospectus contains material information about the Trust and its Shares which is material and/or which may be important to you.You should read the entire prospectus, including "Risk Factors" before making an investment decision about the Shares. 

Shareholders of the Trust will not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the Commodity Exchange Act of 1936. The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. Neither the Sponsor nor the Trustee of the Trust is subject to regulation by the Commodity Futures Trading Commission. Shareholders will not have the regulatory protections provided to investors in Commodity Exchange Act regulated instruments or commodity pools. 

The Trust that issues SPDR® Gold Shares is not an Exchange Traded Fund registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. Therefore, SPDR® Gold Shares shareholders will not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the Commodity Exchange Act of 1936. The Trust is sponsored by World Gold Trust Services, LLC, a wholly-owned subsidiary of the World Gold Council, and marketed by State Street Global Markets, LLC. 

The Trust is sponsored by World Gold Trust Services, LLC (the "Sponsor"), a wholly-owned subsidiary of the World Gold Council. State Street Global Markets, LLC (the "Marketing Agent") is the marketing agent of the Trust and an affiliate of State Street Global Advisors. For more information: State Street Global Markets, LLC, One Lincoln Street, Boston, MA, 02111• 866.320.4053 • www.spdrgoldsharese.com. 

Not FDIC Insured – No Bank Guarantee – May Lose Value 

Neither diversification nor asset allocation ensure profit or guarantee against loss. 


The most popular way to play gold is through ETFs and the biggest gold ETF is the SPDR Gold ETF (NYSE:GLD).  We have put together some details on the SPDR Gold ETF (NYSE:GLD) below for you to take a look at. 
 

SPDR Gold Shares ETF (NYSE:GLD)     

SPDR Gold Shares offer investors an innovative, relatively cost efficient and secure way to access the gold market. SPDR Gold Shares are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that interest through the trading of a security on a regulated stock exchange. The introduction of SPDR Gold Shares was intended to lower many of the barriers, such as access, custody, and transaction costs, that have prevented some investors from investing in gold.     

SPDR Gold Shares represent fractional, undivided beneficial ownership interests in the Trust, the sole assets of which are gold bullion, and, from time to time, cash. SPDR Gold Shares are intended to lower a large number of the barriers preventing investors from using gold as an asset allocation and trading tool. These barriers have included the logistics of buying, storing and insuring gold. In addition, certain pension funds and mutual funds do not or cannot hold physical commodities, such as gold, or the derivatives.     

Key Info

NameSPDR Gold Trust
ObjectiveDesigned to track the price of gold (net of Trust expenses)
SymbolGLD
ExchangeNew York Stock Exchange Arca
Initial PricingBased on the price of 1/10th of an ounce of gold
Estimated Expense0.40%*
Minimum Order Size1 share
SponsorWorld Gold Trust Services LLC
TrusteeBNY Mellon Asset Servicing
CustodianHSBC Bank (USA)
Marketing AgentState Street Global Markets, LLC, an affiliate of State Street Global Advisors
Short Sale EligibleYes
Margin EligibleYes
StructureContinuously offered, open-ended investment trust

* The Sponsor and the Marketing Agent have agreed to reduce the fees payable to them from the assets of the Trust to the extent required so that the estimated ordinary expenses of the trust do not exceed an amount equal to 0.40% per annum of the daily net asset value during the period ending seven years from the date of the Trust Indenture or upon the earlier termination of the Marketing Agent Agreement. Investors should be aware that if the value of the Trust assets is less than approximately $388 million, the ordinary expenses of the Trust will be accrued at a rate greater than 0.40% per year of the daily ANAV of the Trust even after the Sponsor and the marketing Agent have completely reduced their combined fees of 0.30% per year of the daily ANAV of the Trust. This amount is based on the estimated ordinary expenses of the Trust.     


           

SPDR Gold Trust Advantages

Easily AccessibleListed on the NYSE Arca.
SecureThe Gold Shares represent fractional, undivided interests in the Trust, the sole assets of which are physical gold bullion and, from time to time, cash.
Relatively Cost EffectiveFor many investors, transaction costs related to the Gold Shares are expected to be lower than the costs associated with the purchase, storage, and insurance of gold bullion in a traditional gold bullion account.
LiquidStructure allows for baskets to be created and redeemed according to market demand, creating liquidity.
TransparentThere exists a 24-hour global over-the counter market for gold bullion, which provides readily available market data. The price, holdings, and net asset value of Gold Shares, as well as market data for the overall gold bullion market, can be tracked daily at spdrgoldshares.com.
FlexibleGold Shares (NYSE Arca: GLD) are listed on the New York Stock Exchange Arca and trade the same way ordinary stocks do. It is possible to buy or sell Gold Shares continuously throughout the trading day on the exchange at prices established by the market. Additionally, it is possible to place market, limit and stop-loss orders of Gold Shares.

Investors have turned to gold ETFs as a safe haven during the recent stock market turmoil.  They offer a great way to protect you against risk in your portfolio during uncertain times. We have put together some other ETF options for your viewing below:                    

LONG:                    

The investment SPDR Gold ETF (NYSE:GLD) seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the trust terminates and liquidates its assets, or as otherwise required by law or regulation.                    

The investment ETF (NYSE:GDX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts (ADRs) of companies involved in the gold mining industry. The fund is nondiversified.                    

The Funds ETF (NYSE:GDXJ) investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index (the "Junior Gold Miners Index"). For a further description of the Junior Gold Miners Index, see "Junior Gold Miners Index."                    

The objective of ETF (NYSE:SGOL) the newly listed shares is to reflect the performance of the price of Gold bullion, less the Trust's operating expenses. The Trust is open ended and is designed for investors who want a cost-effective(1) and convenient(2) way to invest in Gold as well as diversify their Gold holdings.                    

The investment ETF (NYSE:UGL) will seek to replicate, net of expenses, twice the performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.                    

The investment ETF (NYSE:DGL) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index – Optimum Yield Gold Excess Return. The index is a rules-based index composed of futures contracts on gold and is intended to reflect the performance of gold.                    

The investment ETF (NYSE:DGP) seeks to replicate, net of expenses, twice the daily performance of the Deutsche Bank Liquid Commodity index – Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.                    

The objective ETF (NYSE:IAU) of the trust is for the value of its shares to reflect, at any given time, the price of gold owned by the trust at that time, less the trust's expenses and liabilities. The trust is not actively managed. It receives gold deposited with it in exchange for the creation of baskets of iShares, sells gold as necessary to cover the trust's liabilities, and delivers gold in exchange for baskets of iShares surrendered to it for redemption. The trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.                    

SHORT:                    

The investment ETF (NYSE: DZZ) seeks to replicate, net of expenses, twice the inverse of the daily performance of the Deutsche Bank Liquid Commodity index – Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.                     The investment ETF (NYSE: GLL) will seek to replicate, net of expenses, twice the inverse daily performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics inverse to the index. It may employ leveraged investment techniques in seeking its investment objective. 

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