The iShares Gold Trust (NYSEARCA:IAU) tracks the gold spot price, less expenses and liabilities, using gold bars held in vaults around the world.
IAU is an efficient way for investors to hold physical gold. For retail investors, the fund removes the complexities of buying, transporting, storing and insuring physical gold.
Using a grantor trust structure, the fund is very stable. The underlying gold bars are held in vaults around the world, with an inventory list available on the issuer’s website.
Similar to its competitor, SPDR Gold Trust (NYSEARCA:GLD), investors should take into consideration that long-term gains have noteworthy tax liabilities, since IAU is considered a collectible.
The daily net asset value (NAV) of the trust is based on a given day’s LBMA Gold Price PM. Where IAU shines for buy-and-hold retail investors is in its low expense ratio of 0.40%.
At launch, shares of IAU corresponded to 1/100th of an ounce of gold (though this will decrease over time due to expenses). The fund has $29 billion in assets under management and offers a solid choice for gold investors.
The investment seeks to reflect generally the performance of the price of gold. The Trust seeks to reflect such performance before payment of expenses and liabilities. It is not actively managed.
The fund does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of gold. An investment in physical gold requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing and insurance of the metal.
However, any interested investors should exercise their own due diligence in deciding whether or not this fund fits their own individual portfolio needs and goals.