SPDR Gold Shares (also known as SPDR Gold Trust) is a gold exchange-traded fund managed and marketed by State Street Global Advisors. As of September 2010, SPDR Gold Shares is the second-largest exchange-traded fund (ETF) in the world.[1]
This ETF denotes a share of gold bullion, which is unlike many ETFs which represent ownership in a basket of stocks. SPDR Gold Shares are designed to track the price of a tenth of an ounce of gold. If the share price differs from the gold market price, the fund's manager exchanges blocks of 100,000 shares for 10,000 ounces of gold. The possibility of such exchanges keeps the ETF price roughly in line with the gold price, although the prices can diverge during each day.
As of October 30, 2010, the trust has 41,574,486.00 ounces of gold in its custody, representing an investment of $55,972,246,241.98.[2] SPDR Gold Shares is one of the top ten largest holders of gold in the world, behind France and ahead of China.[3]
Management
The Trust’s allocated gold bullion is kept in the form of London Good Delivery gold bars (400 oz.) and held by the Custodian, HSBC Bank USA, in its London vault or in the vaults of sub-custodians.[4] The ETF pays an annual expense charge of 0.40% per annum.[4] The ETF has been criticized by Catherine Austin Fitts, Carolyn Betts, and Hinde Capital for its extremely complex structure and prospectus, possible conflict of interest in its relationships with HSBC and JPMorgan Chase which are believed to have large short positions in gold, and overall lack of transparency.[5][6] The fund's acceptance of leased gold from "Authorized Participants" may create the risk of competing claims of title on the fund's gold.[6] Some critics compair the ETF with mortgage-backed securities and collateralized debt obligations.[5][6] These problems with SPDR Gold Trust are not necessarily unique to the fund, however as the dominant gold ETF the fund has received the most extensive analysis.
Stock market listings
The fund (under the name streetTRACKS Gold Shares) was first listed on the New York Stock Exchange in November of 2004 by State Street Global Advisors and sponsored by the World Gold Council.[7] Since 13th December 2007 and following a name change on 20th May 2008, SPDR Gold Shares has traded on NYSE Arca (NYSE: GLD). It also trades on the Singapore Stock Exchange (SGX:GLD 10US$), the Tokyo Stock Exchange (TYO: 1326) and the Stock Exchange of Hong Kong (SEHK: 2840).[2]
See also
References
- ^ "Largest ETFs: Top 25 ETFs By Market Cap". ETFdb. Retrieved 2010-11-03.
- ^ a b "Bringing the Gold Market to Investors". World Gold Trust Services, LLC. Retrieved 2010-10-30.
- ^ Johnston, Michael. "GDX vs. GDXJ: A Better Way To Play Gold?". Carolean Capital Partners LLC. Retrieved 2010-10-30.
- ^ a b "Key information" (PDF). World Gold Trust Services, LLC. Retrieved 2010-10-30.
- ^ a b Catherine Austin Fitts, Carolyn Betts, "GLD and SLV: Disclosure in the Precious Metals Puzzle Palace", Solari
- ^ a b c "Precious Metals ETF Alchemy" (PDF). Hinde Capital Investor Presentation. 2010-08-12.
- ^ "Exchange Traded Gold: A World Gold Council Initiative". Exchange Traded Gold Limited. Retrieved 2010-11-03.