UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM 10-Q
FORM10-Q
☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
for the quarterly period ended December 31, 20172022
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
for the transition period from ________ to ________
Commission file number:001-37996
WORLD CURRENCY GOLD TRUST
(SPONSORED BY WGC USA ASSET MANAGEMENT COMPANY, LLC)
(Exact Name of Registrant as Specified in Its Charter)
|
| |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
c/oWGC USA Asset Management Company, LLC
685 Third Avenue, 27th FloorSuite 2702
New York, New York 10017
(Address of Principal Executive Offices)
(212)317-3800
(212) 317-3800
(Registrant’sRegistrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section12(b) of the Act:
Title of each class | Trading Symbol(s) | Nameofeachexchange onwhichregistered | ||
SPDR® Gold MiniShares® Trust | GLDM® | NYSE Arca |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ | |||||
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒☐
Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes ☐ No ☒
INDEX
PART I—FINANCIAL INFORMATION:
Item 1. Unaudited Financial Statements
Index
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Combined Statements of Financial Condition
atAt December 31, 20172022 (unaudited) and September 30, 20172022
| (Amounts in 000’s of US$ except for share and per share data) | Dec-31, 2017 | Sep-30, 2017 | ||||||||
| (unaudited) | ||||||||||
ASSETS | ||||||||||
Investment in Gold, at fair value (cost $18,434 and $13,592, at December 31, 2017 and September 30, 2017, respectively) | $ | 19,385 | $ | 14,406 | ||||||
Gold Delivery Agreement receivable | — | 21 | ||||||||
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Total Assets | $ | 19,385 | $ | 14,427 | ||||||
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| |||||||
LIABILITIES | ||||||||||
Accounts payable to Sponsor | $ | 5 | $ | 4 | ||||||
Gold Delivery Agreement payable | 134 | 50 | ||||||||
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Total Liabilities | $ | 139 | $ | 54 | ||||||
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Net Assets | $ | 19,246 | $ | 14,373 | ||||||
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| |||||||
Shares issued and outstanding(1) | 160,000 | 120,000 | ||||||||
Net asset value per Share | $ | 120.29 | $ | 119.77 | ||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Sep-30, 2022 | ||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investments in Gold, at fair value (cost $4,932,172 and $4,864,730 at December 31, 2022 and September 30, 2022, respectively) | $ | 5,158,100 | $ | 4,692,387 | ||||
Total Assets | $ | 5,158,100 | $ | 4,692,387 | ||||
LIABILITIES | ||||||||
Accounts payable to Sponsor | $ | 428 | $ | 397 | ||||
Gold payable | 7,196 | 52,777 | ||||||
Total Liabilities | $ | 7,624 | $ | 53,174 | ||||
Net Assets | $ | 5,150,476 | $ | 4,639,213 | ||||
See notes to theunaudited financial statements.
Combined Schedules of Investment
(Amounts in 000’s except for percentages) | ||||||||||||||||
Ounces of | % of | |||||||||||||||
December 31, 2022 | gold | Cost | Fair Value | Net Assets | ||||||||||||
(unaudited) | �� | |||||||||||||||
Investment in Gold | 2,846.1 | $ | 4,932,172 | $ | 5,158,100 | 100.15 | % | |||||||||
Total Investment | $ | 4,932,172 | $ | 5,158,100 | 100.15 | % | ||||||||||
Liabilities in excess of other assets | (7,624 | ) | (0.15 | )% | ||||||||||||
Net Assets | $ | 5,150,476 | 100.00 | % | ||||||||||||
Ounces of | % of | |||||||||||||||
September 30, 2022 | gold | Cost | Fair Value | Net Assets | ||||||||||||
Investment in Gold | 2,806.9 | $ | 4,864,730 | $ | 4,692,387 | 101.15 | % | |||||||||
Total Investment | $ | 4,864,730 | $ | 4,692,387 | 101.15 | % | ||||||||||
Liabilities in excess of other assets | (53,174 | ) | (1.15 | )% | ||||||||||||
Net Assets | $ | 4,639,213 | 100.00 | % | ||||||||||||
See notes to theunaudited financial statements.
Unaudited Combined Statements of Operations
For the Three Months Ended December 31, 2022 and December 31, 2021
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
EXPENSES | ||||||||
Sponsor fees | $ | 1,232 | $ | 1,957 | ||||
Total expenses | 1,232 | 1,957 | ||||||
Net investment loss | $ | (1,232 | ) | $ | (1,957 | ) | ||
Net realized and change in unrealized gain/(loss) on investment in gold | ||||||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | $ | (9 | ) | $ | 106 | |||
Net realized gain/(loss) from gold distributed for the redemption of shares | 3,127 | 14,355 | ||||||
Net change in unrealized gain/(loss) on investment in gold | 398,270 | 173,327 | ||||||
Net realized and change in unrealized gain/(loss) on investment in gold | $ | 401,388 | $ | 187,788 | ||||
Net income/(loss) | $ | 400,156 | $ | 185,831 | ||||
See notes to the unaudited financial statements.
Unaudited Combined Statements of Cash Flows
For the Three Months Ended December 31, 2022 and December 31, 2021
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
INCREASE/DECREASE IN CASH FROM OPERATIONS: | ||||||||
Cash proceeds received from sales of gold | $ | 1,201 | $ | 1,972 | ||||
Cash expenses paid | (1,201 | ) | (1,972 | ) | ||||
Increase/(Decrease) in cash resulting from operations | - | - | ||||||
Cash and cash equivalents at beginning of period | - | - | ||||||
Cash and cash equivalents at end of period | $ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||||||||
Value of gold received for creation of shares-net of change in gold receivable | $ | 488,680 | $ | 67,836 | ||||
Value of gold distributed for redemption of shares-net of change in gold payable | $ | 423,154 | $ | 285,426 | ||||
See notes to the unaudited financial statements.
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||
Net income/(loss) | $ | 400,156 | $ | 185,831 | ||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||
Proceeds from sales of gold to pay expenses | 1,201 | 1,972 | ||||||
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees | 9 | (106 | ) | |||||
Net realized (gain)/loss from gold distributed for the redemption of shares | (3,127 | ) | (14,355 | ) | ||||
Net change in unrealized (gain)/loss on investment in gold | (398,270 | ) | (173,327 | ) | ||||
Increase/(Decrease) in accounts payable to Sponsor | 31 | (15 | ) | |||||
Net cash provided by operating activities | $ | - | $ | - | ||||
Unaudited CombinedStatements of Changes in Net Assets
Three Months Ended December 31, 2022 and December 31, 2021
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
Net Assets - Opening Balance | $ | 4,639,213 | $ | 4,387,065 | ||||
Creations | 488,680 | 67,836 | ||||||
Redemptions | (377,573 | ) | (285,426 | ) | ||||
Net investment loss | (1,232 | ) | (1,957 | ) | ||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | (9 | ) | 106 | |||||
Net realized gain/(loss) from gold distributed for the redemption of shares | 3,127 | 14,355 | ||||||
Net change in unrealized gain/(loss) on investment in gold | 398,270 | 173,327 | ||||||
Net Assets - Closing Balance | $ | 5,150,476 | $ | 4,355,306 | ||||
See notes to the unaudited financial statements.
Statements of Financial Condition
At December 31, 2022 (unaudited) and September 30, 2022
(Amounts in 000’s of US$ except for share and per share data) | Dec-31, 2022 | Sep-30, 2022 | ||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investments in Gold, at fair value (cost $4,932,172 and $4,864,730 at December 31, 2022 and September 30, 2022, respectively) | $ | 5,158,100 | $ | 4,692,387 | ||||
Total Assets | $ | 5,158,100 | $ | 4,692,387 | ||||
LIABILITIES | ||||||||
Accounts payable to Sponsor | $ | 428 | $ | 397 | ||||
Gold payable | 7,196 | 52,777 | ||||||
Total Liabilities | $ | 7,624 | $ | 53,174 | ||||
Net Assets | 5,150,476 | 4,639,213 | ||||||
Shares issued and outstanding (1) | 143,150,000 | 139,750,000 | ||||||
Net asset value per Share | $ | 35.98 | $ | 33.20 | ||||
(1) | Authorized share capital is unlimited and the par value of the Shares is $0.00. |
See notes to the unaudited financial statements.
World Currency Gold Trust
Combined Schedules of InvestmentsInvestment
(All balancesAmounts in 000’s000’s except for percentages)
December 31, 2017 | Ounces of gold | Cost | Fair Value | % of Net Assets | ||||||||||||
| (unaudited) | ||||||||||||||||
Investment in Gold | 15.0 | $ | 18,434 | $ | 19,385 | 100.72 | % | |||||||||
Gold Delivery Agreement | — | — | — | 0.00 | % | |||||||||||
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Total Investments | 15.0 | $ | 18,434 | $ | 19,385 | 100.72 | % | |||||||||
Liabilities in excess of other assets | (139 | ) | (0.72 | )% | ||||||||||||
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Net Assets | $ | 19,246 | 100.00 | % | ||||||||||||
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Derivatives Contract
at December 31, 2017 (unaudited)
Underlying Instrument Counter-Party | Notional Value | Expiration Date | Unrealized Appreciation/(Depreciation) | |||||||||
Gold Delivery Agreement Merrill Lynch International | $ | 19,385 | 6/28/19 | $ | — | |||||||
(All balances in 000’s except percentages)
Ounces of | ||||||||||||||||
December 31, 2022 | gold | Cost | Fair Value | % of Net Assets | ||||||||||||
(unaudited) | ||||||||||||||||
Investment in Gold | 2,846.1 | $ | 4,932,172 | $ | 5,158,100 | 100.15 | % | |||||||||
Total Investment | $ | 4,932,172 | $ | 5,158,100 | 100.15 | % | ||||||||||
Liabilities in excess of other assets | (7,624 | ) | (0.15 | )% | ||||||||||||
Net Assets | $ | 5,150,476 | 100.00 | % | ||||||||||||
September 30, 2017 | Ounces of gold | Cost | Fair Value | % of Net Assets | ||||||||||||
Investment in Gold | 11.2 | $ | 13,592 | $ | 14,406 | 100.23 | % | |||||||||
Gold Delivery Agreement | — | — | — | 0.00 | % | |||||||||||
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Total Investments | 11.2 | $ | 13,592 | $ | 14,406 | 100.23 | % | |||||||||
Liabilities in excess of other assets | (33 | ) | (0.23 | )% | ||||||||||||
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Net Assets | $ | 14,373 | 100.00 | % | ||||||||||||
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Derivatives Contract
at September 30, 2017
Underlying Instrument Counter-Party | Notional Value | Expiration Date | Unrealized Appreciation/(Depreciation) | |||||||||
Gold Delivery Agreement Merrill Lynch International | $ | 14,406 | 6/28/19 | $ | — | |||||||
Ounces of | ||||||||||||||||
September 30, 2022 | gold | Cost | Fair Value | % of Net Assets | ||||||||||||
Investment in Gold | 2,806.9 | $ | 4,864,730 | $ | 4,692,387 | 101.15 | % | |||||||||
Total Investment | $ | 4,864,730 | $ | 4,692,387 | 101.15 | % | ||||||||||
Liabilities in excess of other assets | (53,174 | ) | (1.15 | )% | ||||||||||||
Net Assets | $ | 4,639,213 | 100.00 | % | ||||||||||||
See notes to the unaudited financial statements.
World Currency Gold Trust
Unaudited Combined StatementStatements of Operations
For the three months endedThree Months Ended December 31, 2017(1)2022 and December 31, 2021
| (Amounts in 000’s of US$, except per share data) | Three Months Ended Dec-31, 2017 | |||
| (unaudited) | ||||
EXPENSES | ||||
Sponsor fees | $ | 15 | ||
Gold Delivery Provider fees | 7 | |||
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Total expenses | 22 | |||
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Net investment loss | (22 | ) | ||
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Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement | ||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | 1 | |||
Net realized gain/(loss) from Gold Delivery Agreement | (118 | ) | ||
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees | 61 | |||
Net change in unrealized appreciation/(depreciation) on investment in gold | 137 | |||
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Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement | 81 | |||
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Net Income | $ | 59 | ||
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Net Income/(loss) per share | $ | 0.40 | ||
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Weighted average number of shares (in 000’s) | 148 | |||
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Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$, except per share data) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
EXPENSES | ||||||||
Sponsor fees | $ | 1,232 | $ | 1,957 | ||||
Total expenses | 1,232 | 1,957 | ||||||
Net investment loss | (1,232 | ) | (1,957 | ) | ||||
Net realized and change in unrealized gain/(loss) on investment in gold | ||||||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | $ | (9 | ) | $ | 106 | |||
Net realized gain/(loss) from gold distributed for the redemption of shares | 3,127 | 14,355 | ||||||
Net change in unrealized gain/(loss) on investment in gold | 398,270 | 173,327 | ||||||
Net realized and change in unrealized gain/(loss) on investment in gold | 401,388 | 187,788 | ||||||
Net income/(loss) | $ | 400,156 | $ | 185,831 | ||||
Net income/(loss) per share | $ | 2.81 | $ | 1.54 | ||||
Weighted average number of shares (in 000’s) | 142,422 | 120,793 | ||||||
See notes to the unaudited financial statements.
World Currency SPDR®Gold MiniShares®Trust
Unaudited Combined StatementStatements of Cash Flows
For the three months ended December 31, 2017(1)2022 and 2021
| (Amounts in 000’s of US$) | Three Months Ended Dec-31, 2017 | |||
| (unaudited) | ||||
INCREASE/DECREASE IN CASH FROM OPERATIONS: | ||||
Cash proceeds received from sales of gold | $ | 14 | ||
Cash expenses paid | (14 | ) | ||
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| |||
Increase/(Decrease) in cash resulting from operations | — | |||
INCREASE/DECREASE IN CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Cash proceeds from issuance of stock | — | |||
Cash paid for repurchase of stock | — | |||
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Increase/(Decrease) in cash resulting from financing activities | — | |||
Cash and cash equivalents at beginning of period | — | |||
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Cash and cash equivalents at end of period | $ | — | ||
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SUPPLEMENTAL DISCLOSURE OFNON-CASH FINANCING ACTIVITIES: | ||||
Value of gold received for creation of shares - net of gold receivable | $ | 4,814 | ||
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Value of gold distributed for redemption of shares - net of gold payable | $ | — | ||
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SUPPLEMENTAL DISCLOSURE OFNON-CASH OPERATING ACTIVITIES: | ||||
Value of Gold Delivery Agreement inflows - net of Gold Delivery Agreement receivable | $ | 1,360 | ||
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Value of Gold Delivery Agreement outflows - net of Gold Delivery Agreement payable | $ | (1,345 | ) | |
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| (Amounts in 000’s of US$) | Three Months Ended Dec-31, 2017 | |||
| (unaudited) | ||||
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||
Net Income | $ | 59 | ||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||
Proceeds from sales of gold to pay expenses | 21 | |||
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees | (1 | ) | ||
Net realized (gain)/loss from Gold Delivery Agreement | 118 | |||
Net realized (gain)/loss on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees | (61 | ) | ||
Net change in unrealized (appreciation)/depreciation on investment in gold | (137 | ) | ||
Increase/(Decrease) in accounts payable to Sponsor | 1 | |||
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Net cash provided by operating activities | $ | — | ||
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Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
INCREASE/DECREASE IN CASH FROM OPERATIONS: | ||||||||
Cash proceeds received from sales of gold | $ | 1,201 | $ | 1,972 | ||||
Cash expenses paid | (1,201 | ) | (1,972 | ) | ||||
Increase/(Decrease) in cash resulting from operations | - | - | ||||||
Cash and cash equivalents at beginning of period | - | - | ||||||
Cash and cash equivalents at end of period | $ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||||||||
Value of gold received for creation of shares-net of change in gold receivable | $ | 488,680 | $ | 67,836 | ||||
Value of gold distributed for redemption of shares-net of change in gold payable | $ | 423,154 | $ | 285,426 | ||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||
Net income/(loss) | $ | 400,156 | $ | 185,831 | ||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||
Proceeds from sales of gold to pay expenses | 1,201 | 1,972 | ||||||
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees | 9 | (106 | ) | |||||
Net realized (gain)/loss from gold distributed for the redemption of shares | (3,127 | ) | (14,355 | ) | ||||
Net change in unrealized (gain)/loss on investment in gold | (398,270 | ) | (173,327 | ) | ||||
Increase/(Decrease) in accounts payable to Sponsor | 31 | (15 | ) | |||||
Net cash provided by operating activities | $ | - | $ | - | ||||
See notes to the unaudited financial statements.
World Currency SPDR®Gold MiniShares®Trust
Unaudited Combined Statement of Changes in Net Assets
For the three months ended December 31, 2017 (unaudited) and Fiscal Period ended September 30, 2017
| (Amounts in 000’s of US$) | Three Months Ended Dec-31, 2017 | Fiscal Period Ended Sep-30, 2017 | ||||||
| (unaudited) | ||||||||
Net Assets - Opening Balance | $ | 14,373 | $ | — | ||||
Creations | 4,814 | 26,550 | ||||||
Redemptions | — | (11,840 | ) | |||||
Repurchase of stock | — | (1 | ) | |||||
Issuance of stock | — | 1 | ||||||
Net investment loss | (22 | ) | (77 | ) | ||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | 1 | 3 | ||||||
Net realized gain/(loss) from Gold Delivery Agreement | (118 | ) | (1,833 | ) | ||||
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees | 61 | 270 | ||||||
Net realized gain/(loss) from gold distributed for the redemption of shares | — | 486 | ||||||
Net change in unrealized appreciation/(depreciation) on investment in gold | 137 | 814 | ||||||
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Net Assets - Closing Balance | $ | 19,246 | $ | 14,373 | ||||
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See notes to the unaudited financial statements.
Statements of Financial Condition
at December 31, 2017 (unaudited) and September 30, 2017
| (Amounts in 000’s of US$ except for share and per share data) | Dec-31, 2017 | Sep-30, 2017 | ||||||
| (unaudited) | ||||||||
ASSETS | ||||||||
Investment in Gold, at fair value (cost $18,434 and $13,592, at December 31, 2017 and September 30, 2017, respectively) | $ | 19,385 | $ | 14,406 | ||||
Gold Delivery Agreement receivable | — | 21 | ||||||
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Total Assets | $ | 19,385 | $ | 14,427 | ||||
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LIABILITIES | ||||||||
Accounts payable to Sponsor | $ | 5 | $ | 4 | ||||
Gold Delivery Agreement payable | 134 | 50 | ||||||
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Total Liabilities | $ | 139 | $ | 54 | ||||
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Net Assets | $ | 19,246 | $ | 14,373 | ||||
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Shares issued and outstanding(1) | 160,000 | 120,000 | ||||||
Net asset value per Share | $ | 120.29 | $ | 119.77 | ||||
See notes to the unaudited financial statements.
SPDR® Long Dollar Gold Trust
Schedules of Investments
(All balances in 000’s except percentages)
December 31, 2017 | Ounces of gold | Cost | Fair Value | % of Net Assets | ||||||||||||
(unaudited) | ||||||||||||||||
Investment in Gold | 15.0 | $ | 18,434 | $ | 19,385 | 100.72 | % | |||||||||
Gold Delivery Agreement | — | — | — | 0.00 | % | |||||||||||
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| |||||||||
Total Investments | 15.0 | $ | 18,434 | $ | 19,385 | 100.72 | % | |||||||||
Liabilities in excess of other assets | (139 | ) | (0.72 | )% | ||||||||||||
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Net Assets | $ | 19,246 | 100.00 | % | ||||||||||||
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Derivatives Contract
at December 31, 2017 (unaudited)
Underlying Instrument Counter-Party | Notional Value | Expiration Date | Unrealized Appreciation/(Depreciation) | |||||||||
Gold Delivery Agreement Merrill Lynch International | $ | 19,385 | 6/28/19 | $ | — | |||||||
(All balances in 000’s except percentages)
September 30, 2017 | Ounces of gold | Cost | Fair Value | % of Net Assets | ||||||||||||
Investment in Gold | 11.2 | $ | 13,592 | $ | 14,406 | 100.23 | % | |||||||||
Gold Delivery Agreement | — | — | — | 0.00 | % | |||||||||||
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| |||||||||
Total Investments | 11.2 | $ | 13,592 | $ | 14,406 | 100.23 | % | |||||||||
Liabilities in excess of other assets | (33 | ) | (0.23 | )% | ||||||||||||
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Net Assets | $ | 14,373 | 100.00 | % | ||||||||||||
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Derivatives Contract
at September 30, 2017
Underlying Instrument Counter-Party | Notional Value | Expiration Date | Unrealized Appreciation/(Depreciation) | |||||||||
Gold Delivery Agreement Merrill Lynch International | $ | 14,406 | 6/28/19 | $ | — | |||||||
See notes to the unaudited financial statements.
SPDR® Long Dollar Gold Trust
Unaudited Statement of Operations
For the three months ended December 31, 2017(1)
| (Amounts in 000’s of US$, except per share data) | Three Months Ended Dec-31, 2017 | |||
| (unaudited) | ||||
EXPENSES | ||||
Sponsor fees | $ | 15 | ||
Gold Delivery Provider fees | 7 | |||
|
| |||
Total expenses | 22 | |||
|
| |||
Net investment loss | (22 | ) | ||
|
| |||
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement | ||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | 1 | |||
Net realized gain/(loss) from Gold Delivery Agreement | (118 | ) | ||
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees | 61 | |||
Net change in unrealized appreciation/(depreciation) on investment in gold | 137 | |||
|
| |||
Net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement | 81 | |||
|
| |||
Net Income | $ | 59 | ||
|
| |||
Net Income/(loss) per share | $ | 0.40 | ||
|
| |||
Weighted average number of shares (in 000’s) | 148 | |||
|
| |||
See notes to the unaudited financial statements.
SPDR® Long Dollar Gold Trust
Unaudited Statement of Cash Flows
For the three months ended December 31, 2017(1)
| (Amounts in 000’s of US$) | Three Months Ended Dec-31, 2017 | |||
| (unaudited) | ||||
INCREASE/DECREASE IN CASH FROM OPERATIONS: | ||||
Cash proceeds received from sales of gold | $ | 14 | ||
Cash expenses paid | (14 | ) | ||
|
| |||
Increase/(Decrease) in cash resulting from operations | — | |||
INCREASE/DECREASE IN CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Cash proceeds from issuance of stock | — | |||
Cash paid for repurchase of stock | — | |||
|
| |||
Increase/(Decrease) in cash resulting from financing activities | — | |||
Cash and cash equivalents at beginning of period | — | |||
|
| |||
Cash and cash equivalents at end of period | $ | — | ||
|
| |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||||
Value of gold received for creation of shares - net of gold receivable | $ | 4,814 | ||
|
| |||
Value of gold distributed for redemption of shares - net of gold payable | $ | — | ||
|
| |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING ACTIVITIES: | ||||
Value of Gold Delivery Agreement inflows - net of Gold Delivery Agreement receivable | $ | 1,360 | ||
|
| |||
Value of Gold Delivery Agreement outflows - net of Gold Delivery Agreement payable | $ | (1,345 | ) | |
|
| |||
| (Amounts in 000’s of US$) | Three Months Ended Dec-31, 2017 | |||
| (unaudited) | ||||
RECONCILIATION OF NET INCOME/(LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||
Net Income | $ | 59 | ||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||
Proceeds from sales of gold to pay expenses | 21 | |||
Net realized (gain)/loss from investment in gold sold to pay Sponsor fees | (1 | ) | ||
Net realized (gain)/loss from Gold Delivery Agreement | 118 | |||
Net realized (gain)/loss on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees | (61 | ) | ||
Net change in unrealized (appreciation)/depreciation on investment in gold | (137 | ) | ||
Increase/(Decrease) in accounts payable to Sponsor | 1 | |||
|
| |||
Net cash provided by operating activities | $ | — | ||
|
| |||
See notes to the unaudited financial statements.
SPDR® Long Dollar Gold Trust
Statements of Changes in Net Assets
For the three months endedThree Months Ended December 31, 2017 (unaudited)2022 and Fiscal Period ended September 30, 2017December 31, 2021
(Amounts in 000’s of US$) | Three Months Ended Dec-31, 2017 | Fiscal Period Ended Sep-30, 2017 | ||||||
| (unaudited) | ||||||||
Net Assets - Opening Balance | $ | 14,373 | $ | — | ||||
Creations | 4,814 | 26,550 | ||||||
Redemptions | — | (11,840 | ) | |||||
Repurchase of stock | — | (1 | ) | |||||
Issuance of stock | — | 1 | ||||||
Net investment loss | (22 | ) | (77 | ) | ||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | 1 | 3 | ||||||
Net realized gain/(loss) from Gold Delivery Agreement | (118 | ) | (1,833 | ) | ||||
Net realized gain/(loss) on gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees | 61 | 270 | ||||||
Net realized gain/(loss) from gold distributed for the redemption of shares | — | 486 | ||||||
Net change in unrealized appreciation/(depreciation) on investment in gold | 137 | 814 | ||||||
|
|
|
| |||||
Net Assets - Closing Balance | $ | 19,246 | $ | 14,373 | ||||
|
|
|
| |||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
(unaudited) | (unaudited) | |||||||
Net Assets - Opening Balance | $ | 4,639,213 | $ | 4,387,065 | ||||
Creations | 488,680 | 67,836 | ||||||
Redemptions | (377,573 | ) | (285,426 | ) | ||||
Net investment loss | (1,232 | ) | (1,957 | ) | ||||
Net realized gain/(loss) from investment in gold sold to pay Sponsor fees | (9 | ) | 106 | |||||
Net realized gain/(loss) from gold distributed for the redemption of shares | 3,127 | 14,355 | ||||||
Net change in unrealized gain/(loss) on investment in gold | 398,270 | 173,327 | ||||||
Net Assets - Closing Balance | $ | 5,150,476 | $ | 4,355,306 | ||||
See notes to the unauditedfinancial statements.
WORLD CURRENCY GOLD TRUST
Notes to the Unaudited Financial Statements
1. | Organization |
The World Currency Gold Trust (the “Trust”) was organized as a Delaware statutory trust on August 27, 2014 and is governed by the ThirdFourth Amended and Restated Agreement and Declaration of Trust (“Declaration of Trust”), dated as of January April 16,2018 and amended on February 6, 2017,2020, between WGC USA Asset Management Company, LLC (the “Sponsor”) and the Delaware Trust Company (the “Trustee”). The Trust is authorized to issue an unlimited number of shares of beneficial interest (“Shares”).interest. The beneficial interest in the Trust may be divided into one or more series. The Trust has established six separate series. series, one of which is operational as of December 31, 2021.
The accompanying financial statements relate to the Trust and its one operational series SPDR® Long Dollar Gold MiniShares®Trust (“GLDM”). The shares of GLDM (the “Fund”“Shares”), currently began publicly trading on June 26,2018 on the only operational series ofNYSE Arca, Inc. (the “NYSE Arca”). The Shares are also listed on the Trust, which commenced operations on January 27, 2017.Mexican Stock Exchange (Bolsa Mexicana de Valores). The fiscal year-end of both the Trust and the FundGLDM is September 30.30th.
On November 30, 2017, the Sponsor filed a Form S-1 with the Securities and Exchange Commission for The Gold Trust, a series of the Trust (the “New Fund”), which included an independent registered public accounting firm’s audit report on the statement of financial condition as of September 30, 2017 of the New Fund. As of and for the three months ended December 31, 2017, the New Fund has not commenced operations and as a result, there continue to be no Shares outstanding, no assets or liabilities, or revenue or expenses. Accordingly, no statements have been provided for the New Fund within this quarterly report as there are no balances or relevant footnotes to present.
The investment objective of the FundGLDM is for its Shares to trackreflect the performance of the Solactive GLD® Long USD Gold Index (the “Index”),price of gold, less Fundits expenses. GLDM’s only ordinary recurring expense is the Sponsor’s annual fee of 0.10% of its net asset value (“NAV”). The Index seeks to trackSponsor believes that, for many investors, the daily performance ofShares represent a long positioncost-effective investment in physical gold, as represented by the London Bullion Market Association (“LBMA”) Gold Price AM, and a short position in a basket of specificnon-U.S. currencies (i.e., a long U.S. dollar (“USD”) exposure versus the basket). Thosenon-U.S. currencies, which are weighted according to the Index, consist of the following: Euro, Japanese Yen, British Pound Sterling, Canadian Dollar, Swedish Krona, and Swiss Franc (each, a “Reference Currency” and together, the “Reference Currencies”).gold.
BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, (“BNYM” or the “Administrator”), is the Administratoradministrator and Transfer Agent of the Fund.transfer agent. BNYM also serves as the custodian of the Fund’sGLDM’s cash, if any. HSBCICBC Standard Bank plcPlc (the “Custodian”) is responsible for custody of the Fund’s gold bullion. Merrill Lynch International is the Gold Delivery Provider to the Fund.GLDM’s gold. State Street Global Advisors Funds Distributors, LLC is the marketing agent (the “Marketing Agent”).
The Trust had no operations with respect to GLDM’s Shares prior to June 26,2018, other than matters relating to its organization and the registration of the Fund. Solactive AG (the “Index Provider”) has licensedoffer and sale of GLDM’s Shares under the Index to the Sponsor for use with the Fund.Securities Act of 1933, as amended.
The statementStatements of financial conditionFinancial Condition and scheduleSchedules of investmentsInvestment at December 31, 2017, the statements of operations and of cash flows,2021, and the statementStatements of changesOperations, Changes in net assetsNet Assets and Cash Flows for the three months ended December 31, 20172022 and 2021 have been prepared on behalf of the Trust and the Fund without audit.
In the opinion of management of the Sponsor, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of and for the three months ended December 31, 20172022 and for all periods presented have been made. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K10-K for the fiscal year ended September 30, 2017.2022. The results of operations for the three months ended December 31, 20172022 are not necessarily indicative of the operating results for the full fiscal year.
Capitalized terms used but not defined herein have the meaning as set forth in the Declaration of Trust.
The Trust had no operations with respect to the Fund’s Shares prior to January 27, 2017 other than matters relating to its organization, the registration of the Fund’s Shares under the Securities Act of 1933, as amended, and the sale and issuance by the Fund to WGC (US) Holdings, Inc. of 10 Shares of the Fund for an aggregate purchase price of $1,000.
2. | Significant Accounting Policies |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by GLDM and the Fund and Trust.
2.1. | Basis of Accounting |
The Fund
For accounting purposes, GLDM is an investment company within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies, and therefore applies the specialized accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946 Financial Services—therein. It is not registered as an investment company under the Investment Companies.Company Act of 1940, as amended.
These financial statements present the financial condition, results of operations and cash flows of the FundTrust combined with its operating series and the Fund and Trust combined.GLDM separately. For the periods presented, there were no balances or activity for the Trust apart from those from the Fund when combined, and the footnotes accordingly relate to the Fund,GLDM, unless stated otherwise.
2.2 | Basis of Presentation |
The financial statements are presented for the Trust, as the SEC registrant, combined with the FundGLDM and for the FundGLDM individually. The debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the Fund shall beGLDM are enforceable only against the assets of the FundGLDM and not against the assets of the Trust generally or any other fundseries that the Trust may establish in the future.establish.
2.3 | Cash and Cash Equivalents |
Cash and cash equivalents, when outstanding, include highly liquid investments of sufficient credit quality with original maturity of three months or less.
2.4. |
Pursuant to the terms of the Gold Delivery Agreement, the Fund has entered into a transaction to deliver gold bullion to, or receive gold bullion from, Merrill Lynch International, as Gold Delivery Provider, each Business Day. The amount of gold bullion transferred essentially will be equivalent to the Fund’s profit or loss as if the Fund had exchanged the Reference Currencies comprising the Index (“FX Basket”), in the proportion in which they are reflected in the Index, for USDs in an amount equal to the Fund’s holdings of gold bullion on such day. In general, if there is a currency gain (i.e.,the value of the USD against the Reference Currencies comprising the FX Basket increases), the Fund will receive gold bullion. In general, if there is a currency loss (i.e.,the value of the USD against the Reference Currencies comprising the FX Basket decreases), the Fund will deliver gold bullion. In this manner, the amount of gold bullion held by the Fund will be adjusted to reflect the daily change in the value of the Reference Currencies comprising the FX Basket against the USD. The Gold Delivery Agreement requires gold bullion ounces calculated pursuant to formulas contained in the Gold Delivery Agreement to be delivered to the custody account of the Fund or Gold Delivery Provider, as applicable. The fee that the Fund pays the Gold Delivery Provider for its services under the Gold Delivery Agreement is accrued daily and reflected in the calculation of the amount of gold bullion to be delivered pursuant to the Gold Delivery Agreement. The realized gain/loss from the Gold Delivery Agreement is disclosed on the Statement of Operations and the Statement of Changes in Net Assets. The realized gain/loss is only shown on the Statement of Financial Condition to the extent not received/paid.
The Index is designed to represent the daily performance of a long position in physical gold, as represented by the LBMA Gold Price AM, and a short position in the basket of Reference Currencies with weightings determined by the FX Basket. The Reference Currencies and their respective weightings in the Index are as follows: Euro (EUR/USD) (57.6%), Japanese Yen (USD/JPY) (13.6%), British Pound Sterling (GBP/USD) (11.9%), Canadian Dollar (USD/CAD) (9.1%), Swedish Krona (USD/SEK) (4.2%), and Swiss Franc (USD/CHF) (3.6%).
| Fair Value Measurement |
U.S. GAAP defines fair value as the price the Funda fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund’sGLDM’s policy is to value its investments at fair value.
Various inputs are used in determining the fair value of the Fund’sGLDM’s assets or liabilities. Inputs may be based on independent market data (“observable inputs”) or they may be internally developed (“unobservable inputs”). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The level of a value determined for an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are as follows:are:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and
Level 3 – Inputs that are unobservable for the asset and liability, including the Fund’sa fund’s assumptions (if any) used in determining the fair value of investments.
The following table summarizes the Fund’s investmentsGLDM’s investment at fair value:
(Amounts in 000’s of US$) December 31, 2017 | Level 1 | Level 2 | Level 3 | |||||||||
Investment in Gold | $ | 19,385 | $ | — | $ | — | ||||||
Gold Delivery Agreement | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 19,385 | $ | — | $ | — | ||||||
|
|
|
|
|
| |||||||
(Amounts in 000’s of US$) September 30, 2017 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(Amounts in 000’s of US$) | ||||||||||||||||||||||||
December 31, 2022 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Investment in Gold | $ | 14,406 | $ | — | $ | — | $ | 5,158,100 | $ | - | $ | - | ||||||||||||
Gold Delivery Agreement | — | — | — | |||||||||||||||||||||
|
|
| ||||||||||||||||||||||
Total | $ | 14,406 | $ | — | $ | — | $ | 5,158,100 | - | - | ||||||||||||||
|
|
| ||||||||||||||||||||||
(Amounts in 000’s of US$) | ||||||||||||
September 30, 2022 | Level 1 | Level 2 | Level 3 | |||||||||
Investment in Gold | $ | 4,692,387 | $ | - | $ | - | ||||||
Total | $ | 4,692,387 | $ | - | $ | - | ||||||
There were no transfers between Level 1 and other Levels for the three months ended December 31, 2017 and2022 or for the fiscal periodyear ended September 30, 2017.2022.
The Administrator values the gold held by the FundGLDM on the basis of the price of an ounce of gold as determined by ICE Benchmark Administration Limited (“IBA”(the “IBA”), a benchmark administrator, which provides an independently administered auction process, as well as the overall administration and governance for the LBMA Gold Price.London Bullion Market Association (the “LBMA”). In determining the net asset value (“NAV”)NAV of the Fund,GLDM, the Administrator values the gold held by the Fund on the basis of the price of an ounce of gold determined by the IBA 10:30 AM3:00 PM auction process (“LBMA(the “LBMA Gold Price AM”PM”), which is an electronic auction, with the imbalance calculated and the price adjusted in rounds (45 seconds in duration).auction. The auction runs twice daily at 10:30 AM and 3:00 PM London time. The Administrator calculates the NAV of the TrustGLDM on each day the NYSE Arca is open for regular trading, generally as of 12:00 PM New York time. If no LBMA Gold Price AMPM is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 PM New York time on a particular evaluation day, the next most recent LBMA Gold Price AM or PM is used in the determination of the NAV of the Fund,GLDM, unless the Administrator, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such determination.
2.5. | Custody of Gold |
Gold bullion is held by HSBC Bank plc (the “Custodian”)the Custodian on behalf of GLDM, 100% of which is allocated gold in the Fund. During the three-month period ended December 31, 2017, noform of good delivery gold wasbars. A current list of all gold held by the Custodian, including any held with a subcustodian. Duringsubcustodian is available on the fiscal year ended September 30, 2017, no gold was held by a subcustodian.sponsor’s website at www.spdrgoldshares.com.
2.6. | Gold |
Gold Delivery Agreement receivable represents the quantity of gold duecovered by contractually binding orders for the creation of Shares where the gold has not yet been transferred to be received underGLDM’s account. Generally, ownership of the Gold Delivery Agreement. The gold is transferred to the Fund’s allocated gold bullion account at the Custodian within two business days afterof the valuationtrade date.
| Dec-31, 2017 | Sept-30, 2017 | |||||||
| (Amounts in 000’s of US$) | ||||||||
Gold Delivery Agreement receivable | $ | — | $ | 21 | ||||
Dec-31, | Sep-30, | |||||||
(Amounts in 000’s of US$) | 2022 | 2022 | ||||||
Gold receivable | $ | - | $ | - | ||||
2.7. | Gold |
Gold Delivery Agreement payable represents the quantity of gold due to be delivered undercovered by contractually binding orders for the Gold Delivery Agreement. Theredemption of Shares where the gold has not yet been transferred out of GLDM’s account. Generally, ownership of the gold is transferred from the Fund’s allocated gold bullion account at the Custodian within two business days afterof the valuationtrade date.
| Dec-31, 2017 | Sept-30, 2017 | |||||||
| (Amounts in 000’s of US$) | ||||||||
Gold Delivery Agreement payable | $ | 134 | $ | 50 | ||||
Dec-31, | Sep-30, | |||||||
(Amounts in 000’s of US$) | 2022 | 2022 | ||||||
Gold payable | $ | 7,196 | $ | 52,777 | ||||
2.8. | Creations and Redemptions of Shares |
The Fund
GLDM creates and redeems Shares from time to time, but only in one or more Creation Units (a Creation Unit equals a block of 10,000100,000 Shares). The FundGLDM issues Shares in Creation Units to certain authorized participants (“Authorized Participants”) on an ongoing basis. The creation and redemption of Creation Units is only made in exchange for the delivery to the Fund or the distribution by the Fund of the amount of gold and any cash represented by the Creation Units being created or redeemed, theredeemed. This amount of which will be based on the combined net asset value of the number of Shares included in the Creation Units being created or redeemed determined on the day the order to create or redeem Creation Units is properly received.
The Fund commenced trading shares in January 2017. As the Shares of the Fund are redeemable in Creation Units at the option of the Authorized Participants, the FundGLDM has classified the Shares as Net Assets.Assets for financial reporting purposes. Changes in the Shares for the three months ended December 31, 2017 2022 and fiscal period ended September 30, 20172021 are as follows:
| Three Months Ended Dec-31, 2017 | Fiscal Period Ended Sept-30, 2017 | |||||||
| (Amounts in 000’s) | ||||||||
Activity in Number of Shares Issued and Outstanding: | ||||||||
Creations | 40 | 220 | ||||||
Redemptions | (— | ) | (100 | ) | ||||
|
|
|
| |||||
Net change in number of Shares Issued and Outstanding | 40 | 120 | ||||||
|
|
|
| |||||
| Three Months Ended Dec-31, 2017 | Fiscal Period Ended Sept-30, 2017 | |||||||
| (Amounts in 000’s of US$) | ||||||||
Activity in Value of Shares Issued and Outstanding: | ||||||||
Creations | $ | 4,814 | $ | 26,500 | ||||
Redemptions | (— | ) | (11,840 | ) | ||||
|
|
|
| |||||
Net change in value of Shares Issued and Outstanding | $ | 4,814 | $ | 14,710 | ||||
|
|
|
| |||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts are in 000’s) | Dec-31, 2022 | Dec-31, 2021 | ||||||
Activity in Number of Shares Created and Redeemed: | ||||||||
Creations | 14,300 | 3,800 | ||||||
Redemptions | (10,900 | ) | (16,200 | ) | ||||
Net Change in Number of Shares Created and Redeemed | 3,400 | (12,400 | ) | |||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
(Amounts in 000’s of US$) | Dec-31, 2022 | Dec-31, 2021 | ||||||
Activity in Value of Shares Created and Redeemed: | ||||||||
Creations | $ | 488,680 | $ | 67,836 | ||||
Redemptions | (377,573 | ) | (285,426 | ) | ||||
Net change in Value of Shares Created and Redeemed | $ | 111,107 | $ | (217,590 | ) | |||
2.9. | Income and Expense (Amounts in 000’s of US$) |
The Administrator will, at the direction of the Sponsor, sell the Fund’sGLDM’s gold as necessary to pay the Fund’sits expenses. When selling gold to pay expenses, the Administrator will endeavor to sell the smallest amount of gold needed to pay expenses in order to minimize the Fund’sGLDM’s holdings of assets other than gold. Unless otherwise directed by the Sponsor, to meet expenses the Administrator will give a sell order and sell gold to the Custodian at the next LBMA Gold Price AMPM following the salesell order. A gain or loss is recognized based on the difference between the selling price and the average cost of the gold sold, and such amounts are reported as net realized gain/(loss) from investment in gold sold to pay Sponsor expenses on the Statement of Operations.
The Fund’s
GLDM’s net realized and change in unrealized gain/(loss) on investment in gold and Gold Delivery Agreement for the three-month periodthree months ended December 31, 20172022 of $81$401,388 is made up of a realized gainloss of $1$9 from the sale of gold to pay Sponsor fees, a realized loss of ($118) from the Gold Delivery Agreement, a realized gain of $61$3,127 from gold transferred to cover Gold Delivery Agreement and Gold Delivery Provider fees,distributed for the redemption of shares, and a change in unrealized appreciationgain of $137$398,270 on investment in gold.
GLDM’s net realized and change in unrealized gain/(loss) on investment in gold for the three months ended December 31, 2021 of $187,788 is made up of a realized gain of $106 from the sale of gold to pay Sponsor fees, a realized gain of $14,355 from gold distributed for the redemption of shares, and a change in unrealized gain of $173,327 on investment in gold.
2.10. | Income Taxes |
The Fund
GLDM is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Fundit is not subject to U.S. federal income tax. Instead, the Fund’sits income and expenses “flow through” to the Shareholders,shareholders, and the Administrator will report the Fund’sGLDM’s proceeds, income, deductions, gains and losses to the Internal Revenue Service on that basis.
The Sponsor has evaluated whether there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required as of December 31, 2017. There are no open2022. As of December 31, 2022, the 2021,2020 and 2019 tax years orremain open for examination. There were no examinations in progress at period end.
3. | Related |
Effective February 23,2022, the Sponsor reduced its annual fee of 0.18% of the NAV of GLDM to 0.10% of the NAV of GLDM and implemented a one-for-two reverse stock split of the Shares which now represent 1/50th of an ounce of gold. The Sponsor receives anSponsor’s annual fee equal to 0.33%0.10% of the NAV of the Fund,GLDM is calculated on a daily basis.
daily. The Sponsor is responsible for the payment of all GLDM’s ordinary fees and expenses, of the Fund, including but not limited to the following: fees charged by the Fund’s administrator, custodian, index provider, marketing agentGLDM’s Administrator, Custodian, Marketing Agent and trustee;Trustee; exchange listing fees; typical maintenance and transaction fees of The Depository Trust Company; SEC registration fees; printing and mailing costs; audit fees and expenses; and legal fees not in excess of $100,000 per annum and expenses and applicable license fees. The Sponsor is not, however, required to pay any extraordinary expenses incurred in the ordinary course of the Fund’sGLDM’s business as outlined in the Sponsor’s agreement with the Trust.
4. | GLDM Expenses |
The Fund’s
GLDM’s only ordinary recurring operating expenses are expected to beexpense is the Sponsor’s annual fee of 0.33%0.10% of the NAV of the Fund and the Gold Delivery Provider’s annual fee of 0.17% of the NAV of the Fund, each of which accrue daily.GLDM. The Sponsor’s fee is payable by the Fund monthly in arrears, while the Gold Delivery Provider’s fee is paid daily with gold bullionin-kind, so that the Fund’s total annual expense ratio is expected to equal to 0.50% of daily net assets. arrears.
Expenses payable by the Fund will reduce the NAV of the Fund.GLDM.
5. | Concentration of Risk |
The Fund’s
GLDM’s primary business activities are the investment in gold bullion, the gold delivery agreement, and the issuance and sale of Shares.
Various factors could affect the price of gold including: (i) global gold supply and demand, which is influenced by such factors as forward selling by gold producers, purchases made by gold producers to unwind gold hedge positions, central bank purchases and sales, and production and cost levels in major gold-producing countries such as China, Australia, South Africa and the United States; (ii) investors’ expectations with respect to the rate of inflation; (iii) currency exchange rates; (iv) interest rates; (v) investment and trading activities of hedge funds and commodity funds; (vi) other economic variables such as income growth, economic output, and (vi)monetary policies; and (vii) global or regional political, economic or financial events and situations. In addition, while gold it used to preserve wealth by investors around the world, there is no assurance that gold will maintain its long-term value in terms of purchasing power in the future. In the event that the price of gold declines, the Sponsor expects the value of an investment in the Shares to decline proportionately. Each of these events could have a material effect on the Fund’sGLDM’s financial position and results of operations.
The Fund does not hold foreign currency, but it is exposed to foreign currency risk as a result of its transactions under the Gold Delivery Agreement. Foreign currency exchange rates may fluctuate significantly over short periods of time and can be unpredictably affected by political developments or government intervention. The value of the Reference Currencies included in the FX Basket may be affected by several factors, including: monetary policies of central banks within the relevant foreign countries or markets; global or regional economic, political or financial events; inflation or interest rates of the relevant foreign countries and investor expectations concerning inflation or interest rates; and debt levels and trade deficits of the relevant foreign countries.
Currency exchange rates are influenced by the factors identified above and may also be influenced by, among other things: changing supply and demand for a particular currency; monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries); changes in balances of payments and trade; trade restrictions; and currency devaluations and revaluations. Also, governments from time to time intervene in the currency markets, and by regulation, in order to influence rates directly. These events and actions are unpredictable. The resulting volatility in the Reference Currency exchange rates relative to the USD could materially and adversely affect the value of the Shares.
If the Gold Delivery Provider fails to deliver gold pursuant to its obligations under the Gold Delivery Agreement, such failure would have an adverse effect on the Fund in meeting its investment objective. Moreover, to the extent that the Gold Delivery Provider is unable to honor its obligations under the Agreement, such as due to bankruptcy or default under the Agreement or for any other reason, the Fund would need to find a new entity to act in the same capacity as the Gold Delivery Provider. If the Fund could not quickly find a new entity to act in that capacity, the Fund may not be able to meet its investment objective. The transactions under the Gold Delivery Agreement will terminate on June 28, 2019, unless the parties can agree on extension terms. If the parties cannot agree on extension terms and the Fund is unable to find a new entity to act as Gold Delivery Provider, the Fund may not be able to meet its investment objective.
For the three months ended December 31, 2017, the effect of derivative contracts on the Fund’s Statement of Operations was as follows:
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The table below summarizes the average daily notional value of derivative contracts outstanding during the period:
| Three months ended Dec-31, 2017 | Fiscal period ended Sep-30, 2017 | |||||||
| (Amounts in 000’s of US$) | ||||||||
Average notional | $ | 17,674 | $ | 22,963 | ||||
The notional of the contract varies daily based on the amount of gold held at the Custodian.
At December 31, 2017, as well as the fiscal period ended September 30, 2017, the Fund’sover-the-counter (“OTC”) derivative assets and liabilities are as follows:
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At December 31, 2017, as well as the fiscal period ended September 30, 2017, the Fund’s OTC derivative assets, which may offset against the Fund’s OTC derivative liabilities and collateral received from the counterparty, are as follows:
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At December 31, 2017, as well as the fiscal period ended September 30, 2017, the Fund’s OTC derivative liabilities, which may offset against the Fund’s OTC derivative assets and collateral pledged from the counterparty, are as follows:
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The Sponsor and each of its shareholders, members, directors, officers, employees, affiliates and subsidiaries will be indemnified by the Trust and held harmless against any losses, liabilities or expenses incurred in the performance of its duties under the Declaration of Trust without gross negligence, bad faith or willful misconduct. The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters arising under the Declaration of Trust. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Shareholdershareholder or to the Trustee other than as expressly provided for in the Declaration of Trust. Such indemnity includes payment from the Trust of the costs ofand expenses incurred in defending against any indemnified claim or liability under the Declaration of Trust.
The Trustee and each of its officers, affiliates, directors, employees, and agents will be indemnified by the Trust from and against any losses, claims, taxes, damages, reasonable expenses, and liabilities incurred with respect to the creation, operation or termination of the Trust, the execution, delivery or performance of the Declaration of Trust or the transactions contemplated thereby; provided that the indemnified party acted without willful misconduct, bad faith or gross negligence. The Sponsor will not be liable to the Trust, the Trustee or any Shareholdershareholder for any action taken or for refraining from taking any action in good faith, or for errors in judgment or for depreciation or loss incurred by reason of the sale of any gold bullion or other assets held in trust under Declaration of Trust. However, the preceding liability exclusion will not protect the Sponsor against any liability resulting from its own gross negligence, bad faith, or willful misconduct.
7. | Financial Highlights |
The following presentation includes financial highlights related to investment performance and operations of a Share outstanding for the three-month periodthree months ended December 31, 2017. The net investment loss2022 and total expense ratios have been annualized.December 31, 2021. The total return at net asset value is based on the change in net asset value of a Share during the period and the total return at market value is based on the change in market value of a Share on NYSE Arca during the period. An individual investor’s return and ratios may vary based on the timing of capital transactions.
| Three Months Ended Dec-31, 2017 | ||||
Net Asset Value | ||||
Net asset value per Share, beginning of period | $ | 119.77 | ||
|
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Net investment income/(loss) | (0.15 | ) | ||
Net Realized and Change in Unrealized Gain (Loss) | 0.67 | |||
|
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Net Income/(Loss) | 0.52 | |||
|
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Net asset value per Share, end of period | $ | 120.29 | ||
|
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Market value per Share, beginning of period | $ | 118.89 | ||
|
| |||
Market value per Share, end of period | $ | 120.87 | ||
|
| |||
Ratio to average net assets | ||||
Net Investment loss(1) | (0.50 | )% | ||
|
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Gross expenses(1) | 0.50 | % | ||
|
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Net expenses(1) | 0.50 | % | ||
|
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Total Return, at net asset value(2) | 0.43 | % | ||
|
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Total Return, at market value(2) | 1.67 | % | ||
|
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Financial Highlights (Unaudited)
For the three months ended December 31, 2022 and 2021
Three Months | Three Months | |||||||
Ended | Ended | |||||||
Dec-31, 2022 | Dec-31, 2021 | |||||||
(unaudited) | (unaudited) | |||||||
Net Asset Value | ||||||||
Net asset value per Share, beginning of period | $ | 33.20 | $ | 34.65 | ||||
Net investment income/(loss) | (0.01 | ) | (0.02 | ) | ||||
Net Realized and Change in Unrealized Gain/(Loss) | 2.79 | 1.54 | ||||||
Net Income/(Loss) | 2.78 | 1.52 | ||||||
Net asset value per Share, end of period | $ | 35.98 | $ | 36.17 | ||||
Market value per Share, beginning of period | $ | 32.98 | $ | 34.92 | ||||
Market value per Share, end of period | $ | 36.19 | $ | 36.36 | ||||
Ratio to average net assets | ||||||||
Net investment loss(1) | (0.10 | )% | (0.18 | )% | ||||
Gross expenses(1) | 0.10 | % | 0.18 | % | ||||
Net expenses(1) | 0.10 | % | 0.18 | % | ||||
Total Return, at net asset value(2) | 8.37 | % | 4.39 | % | ||||
Total Return, at market value(2) | 9.73 | % | 4.12 | % | ||||
(1) | Percentages are annualized. |
(2) | Percentages are not annualized. |
No comparative has been provided as the fund commenced operations on January 27, 2017.
The Sponsor has evaluated events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
| Item2. |
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This information should be read in conjunction with the financial statements and notes included in Item1 of PartI of this Quarterly Report. This Quarterly Report, including the exhibits hereto and the information incorporated by reference herein, contains “forward-looking statements”“forward-looking statements” within the meaning of Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. Except for historical information, statements about future gold prices, gold bullion sales, foreign currencies (including the Reference Currencies), foreign currency exchange rates, costs, plans, or objectives are forward-looking statements based on our estimates, beliefs, assumptions and projections. Words such as “could,“could,” “may,“would,” “expect,“may,” “anticipate,“expect,” “target,“project,” “goals,“intend,” “project,“plan,” “intend,“believe,” “plan,“seek,” “believe,“estimate,” “seek, and “predict,” “outlook,” “estimate,” “predict,” and variations on such words, and similar expressions that reflect our current views with respect to future events and Fundfund performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties that are difficult to predict and many of which are outside of our control, and actual results could differ materially from those discussed. Important factors that we believe could affect performance and cause results to differ materially from our expectations are described in the sections entitled “Risk Factors”“Risk Factors” and “Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations”Operations” in the Annual Report on Form 10-K for the fiscal year ended September 30, 2017,2022, as updated from time to time in the Fund’sWorld Gold Trust’s Securities and Exchange Commission filings.
Organization and
Trust Overview
The World Currency Gold Trust (the “Trust”) was organizedformed as a Delaware statutory trust on August 27, 2014 and is governed by the Third Amended and Restated Agreement and Declaration of Trust (“Declaration of Trust”) dated as of January 6, 2017, between WGC USA Asset Management Company, LLC (the “Sponsor”) and the Delaware Trust Company (the “Trustee”).2014. The Trust is authorized to issue an unlimited numberconsists of sharesmultiple series (each, a “Fund” and collectively, the “Funds”). Each Fund issues common units of beneficial interest (“Shares”). The beneficial interest in the Trust may be divided into one or more series. The Trust has established six separate series. The accompanying unaudited financial statements relate to the Trust and SPDR® Long Dollar Gold Trust (the “Fund”), currently the only operational series of the Trust, which commenced operations in the first calendar quarter of 2017. On November 30, 2017, the Sponsor filed aForm S-1 with the Securities and Exchange Commission for The Gold Trust, a series of the Trust. The fiscal year end of both the Trust and the Fund is September 30. The Fund issues shares of beneficial interest (“Shares”), whichthat represent units of fractional undivided beneficial interest in and ownership of only thatsuch Fund. The Trust has had no operations prior to January 27, 2017, other than matters relating to its organization, the registrationterm of the Fund’sTrust and each Fund is perpetual (unless terminated earlier in certain circumstances). The Trust was organized in separate series as a Delaware statutory trust rather than as separate statutory trusts to achieve certain administrative and other efficiencies. The Trust is sponsored by WGC USA Asset Management Company, LLC (the “Sponsor”).
The Trust established six separate series, of which only SPDR® Gold MiniShares® Trust (“GLDM”) is operational as of December 31, 2022. GLDM commenced operations on June 26, 2018. GLDM’s investment objective is for its shares under(the “Shares”) to reflect the Securities Act of 1933, as amended, and the sale and issuance by the Fund on December 19, 2016 to WGC (US) Holdings, Inc., an affiliateperformance of the Sponsor, of 10 Shares of the Fund at an aggregate purchase price of $1,000. The Fund’s Shares began tradinggold, less its expenses.
Gold is held by ICBC Standard Bank Plc (the “Custodian”) on the NYSE Arca on January 30, 2017. Asbehalf of February 6, 2018, the Fund has issued 160,000 shares, which are currently outstanding.GLDM.
As of the date of this quarterly report, Goldman, Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch Professional Clearing Corp., Morgan Stanley & Co., LLC, UBS Securities LLC and Virtu Financials BDAmericas LLC are the only Authorized Participants. An updated list of Authorized Participants can be obtained from the Administrator or the Sponsor.
The investment objective
In general, the USD value of an investment in Shares of the Fund is expected to increase when both the price of gold goes up and the value of the USD increases against the value of the Reference Currencies comprising the FX Basket (as weighted in the Index). Conversely, the USD value of an investment in Shares, in general, is
expected to decrease when the price of gold goes down and the value of the USD decreases against the value of the Reference Currencies comprising the FX Basket (as weighted in the Index). If the price of gold increases and the value of the USD decreases against the value of the Reference Currencies comprising the FX Basket, or vice versa, the net impact of these changes will determine the NAV of the Fund on a daily basis.
Investing in the Shares does not insulate the investor from certain risks, including price volatility. The following chart illustrates the movement in the market price of the Shares and NAV of the Shares against the Index as well as the corresponding gold price (per 1/10100 of an oz. of gold) since the day the Shares first began trading on the NYSE Arca:
NAVShare price& IndexNAV v. gold price from January 30, 2017- June 26, 2018 to December 31, 20172022
Source: Bloomberg, ICE Benchmark Administration, Solactive AG
Gold Delivery Agreement Activity
The Gold Delivery Agreement is an agreement between the Fund and the Gold Delivery Provider pursuant to which gold is delivered to or from the Fund to reflect the Fund’s gains and losses with respect to the Reference Currencies comprising the FX Basket. The amount of gold bullion transferred under the Gold Delivery Agreement (the “Daily Deliverable Amount”) essentially is equivalent to the Fund’s profit or loss as if the Fund had exchanged the Reference Currencies for USDs in an amount equal to the Fund’s holdings of gold bullion on such day. In general, if there is a currency gain (i.e., the value of the USD against the Reference Currencies comprising the FX Basket increases), the Fund will receive gold bullion. In general, if there is a currency loss (i.e., the value of the USD against the Reference Currencies comprising the FX Basket decreases), the Fund will deliver gold bullion. In this manner, the amount of gold bullion held by the Fund will be adjusted to reflect the daily change in the value of Reference Currencies comprising the FX Basket against the USD. For more information about the Gold Delivery Agreement, see Note 2.4 to the unaudited financial statements.
From January 30, 2017 (the date the shares began trading on the NYSE Arca) to December 31, 2017, the Daily Deliverable Amount (gross less the fee paid to the Gold Delivery Provider) under the Gold Delivery Agreement ranged from 252.515 ounces of gold bullion delivered to 155.187 ounces of gold bullion received, having corresponding market values, respectively, of $334,178 and $197,747. Over that same period, the Fund delivered a net amount of 1,556.816 ounces of gold bullion, having a corresponding market value of $1,984,652.
Critical Accounting Policy
Valuation of Gold, Definition of NAV
The Fund’s policy is to value
GLDM values the investment in gold bullion at fair value. BNY Mellon Asset Servicing, a division of The AdministratorBank of New York Mellon (the “Administrator”), will value theany gold bullion held by the FundGLDM on the basis of the price of an ounce of gold as determined by the ICE Benchmark Administration Limited (“IBA”(the “IBA”), a benchmark administrator, which provides an independently administered auction process, as well as the overall administration and governance for the LBMA Gold Price. The net asset value (“NAV”) of the Fund is the aggregate value of the Fund’s assets, including Gold Delivery Agreement less its liabilities.. In determining the NAV, of the Fund, the Administrator valueswill value the gold bullion held by the FundGLDM on the basis of the price of an ounce of gold determined by the IBA 10:30 AM3:00 PM auction process (“LBMA(the “LBMA Gold Price AM”PM”), which is an electronic auction, with the imbalance calculated and the price adjusted in rounds (45 seconds in duration). The auction runs twice daily at 10:30 AM and 3:00 PM London time. The Administrator determineswill calculate the NAV of the Fund on each day the NYSE Arca is open for regular trading, generally as ofat the earlier LBMA Gold Price PM for the day or 12:00 PM New York time. If no LBMA Gold Price AM(AM or PM) is made on a particular evaluation day or if the LBMA Gold Price PM has not been announced by 12:00 PM New York time on a particular evaluation day, the next most recent LBMA Gold Price AM or PM will be used in the determination of the NAV, of the Fund, unless the Administrator, in consultation with the Sponsor determines that such price is inappropriate to use as the basis for such determination. Gold held by GLDM is reported at fair value on the Statement of Financial Condition.
Once the value of the gold has been determined, the Administrator subtracts all estimated accrued fees, expenses and other liabilities of the FundGLDM from the total value of the gold and all other assets of the Fund.GLDM. The resulting figure is the NAV of the Fund.NAV. The NAV of the Fund is used to compute the Sponsor’s fee and gold delivery provider fee. The Administrator determines the NAV per Share by dividing the NAV of the FundGLDM by the number of Shares outstanding as of the close of trading on NYSE Arca.
Inspectorate International Limited (“Inspectorate”) conducts two counts each year of the gold bullion held on behalf of the Trust at the vaults of the Custodian. A complete bar count is conducted once per year and coincides with the Trust’s financial year end at September 30th. On October 6, 2022, Inspectorate completed the annual full count of the Trust’s gold bullion held by the Custodian. The second count is a random sample count and is conducted at a date which falls within the same financial year and was conducted most recently on May 4, 2022. The results can be found on www.spdrgoldshares.com. The Sponsor generally visits the vaults of the Custodian twice a year as part of its due diligence procedures.
Recent Developments
GLDM as well as the Sponsor and its service providers are vulnerable to the effects of geopolitical events and the continuation of the war in Ukraine or other hostilities. Geopolitical events and the continuation of the hostilities in Ukraine or other hostilities could disrupt and potentially impact the business activities of the Sponsor and its service providers and have an adverse effect on GLDM.
In late February 2022, Russia launched an invasion of Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other countries in the region and in the west. On March 7, 2022, the LBMA suspended its accreditation of six Russian precious metals refiners. The LBMA stated that existing bars produced by the refiners before their suspension will still be accepted as good delivery. Following an announcement at the G7 Summit to collectively ban the import of Russian gold, the UK passed regulations which prohibit the direct or indirect (i) import of gold that originated in Russia, (ii) acquisition of gold that originated in Russia or is located in Russia and (iii) supply or delivery of gold that originated in Russia, all after July 21, 2022. Similarly, US regulations prohibit the import of gold of Russian origin into the United States on or after June 28, 2022 and EU regulations prohibit the direct or indirect import, purchase or transfer of gold if it originates in Russia and has been exported from Russia after July 22, 2022.
The responses of countries and political bodies to Russia’s actions, the larger overarching tensions, and Ukraine’s military response and the potential for wider conflict may increase financial market volatility generally, have adverse effects on regional and global economic markets, and cause volatility in the price of gold and the price of the Shares. In addition, the conflict in Ukraine, along with global political fallout and implications including sanctions, shipping disruptions, collateral war damage, and a potential expansion of the conflict beyond Ukraine’s borders, could disturb the gold market.
War and other geopolitical events in eastern Europe, including but not limited to Russia and Ukraine, may cause volatility in commodity prices including precious metals prices. These events are unpredictable and may lead to extended periods of price volatility. To date, the impact of the conflict in Ukraine, including the regulatory responses to such conflict, have not materially affected the operations of GLDM and have not materially impacted the price of gold or the share price of GLDM.
Results of Operations
The Fund commenced operations on January 27, 2017 and in
In the period from then tothree months ended December 31, 2017, 260,0002022, 14,300,000 Shares (26(143 Creation Units) were created in exchange for 25,849.8283,925.2 ounces of gold, 10,900,000 Shares (109 Creation Units) were redeemed in exchange for 216,414.0 ounces of gold and 47.4698.6 ounces of gold were sold to pay expenses.Sponsor fees. For accounting purposes, GLDM reflects creations and redemptions on the date of receipt of a notification of a creation but does not issue Shares until the requisite amount of gold is received. Upon a redemption, GLDM delivers gold upon receipt of Shares. These creations were completed in the normal course of business.
At December 31, 2017,2022, the amount of gold owned by GLDM and held by the Custodian held 14,952.1 ounces of gold on behalf of the Fund in its vault was 2,846,084.1 ounces, 100% of which is allocated gold in the form of London Good Delivery gold bars including gold payable, if any, with a market value of $19,385,415 (cost — $18,433,859)$5,158,100,494 based on the LBMA Gold Price AMPM on December 31, 2017. Through2022 (cost —$4,932,172,417).
At September 30, 2022, the date of this report, (i) 103.3 ouncesamount of gold were payableowned by the Custodian in connection with the settlement of the Gold Delivery AgreementGLDM and (ii) the Fund has used no subcustodians.
On September 12, 2017, Inspectorate International Limited concluded the annual full count of the Fund’s gold bullion held by the Custodian. On October 2, 2017, Inspectorate International Limited concluded reconciliation procedures from September 12, 2017 throughcustodian in its vault was 2,806,871.5 ounces, 100% of which is allocated gold in the form of London Good Delivery gold bars with a market value of $4,692,387,415 based on the LBMA Gold Price PM on September 30, 2017. The results can be found on www.spdrgoldshares.com.2022 (cost — $4,864,729,657).
Cash Resources and Liquidity
At December 31, 2017, the Fund2022, GLDM did not have any cash balances. When selling gold to pay expenses, the AdministratorGLDM endeavors to sell the smallestexact amount of gold needed to pay expenses in order to minimize the Fund’sGLDM’s holdings of assets other than gold.gold or any gold receivable. As a consequence, we expect that the FundGLDM will not record any net cash flow from its operations and that its cash balance will be zero at the end of each reporting period.
Analysis
Movements in the Price of Gold
As movements in the price of gold are expected to directly affect the price of the Fund’s Shares, investors shouldit is important to understand and followthe recent movements in the price of gold. Investors should be aware thatHowever, past movements in the price of gold price are not indicators of future movements.
The following chart shows movements in the price of gold based on the LBMA Gold Price AMPM in U.S. dollars per ounce over the period from January 30, 2017June 26, 2018 (the first date the Shares began trading on the NYSE Arca) to December 31, 2017.2022.
Daily gold price – January 30, 2017Gold Price - June26, 2018 to December 31, 20172022
The average, high, low andend-of-period gold prices for the three and twelve-month periods over the prior three years and for the period from January 30, 2017June 26, 2018 (the first date the Shares began trading on the NYSE Arca) through December 31, 2017,2022, based on the LBMA Gold Price AMPM, were:
Period | Average | High | Date | Low | Date | End of period | Last business day(1) | |||||||||||||||
January 30, 2017 to | $ | 1,230.10 | $ | 1,256.90 | Mar 27, 2017 | $ | 1,189.85 | Jan 30, 2017 | $ | 1,241.70 | Mar 31, 2017 | |||||||||||
April 1, 2017 to | $ | 1,257.49 | $ | 1,292.70 | Jun 07, 2017 | $ | 1,221.00 | May 11, 2017 | $ | 1,243.25 | Jun 30, 2017 | |||||||||||
July 1, 2017 to | $ | 1,278.01 | $ | 1,350.90 | Sep 08, 2017 | $ | 1,207.55 | Jul 10, 2017 | $ | 1,286.95 | Sep 29, 2017 | |||||||||||
October 1, 2017 to | $ | 1,276.72 | $ | 1,305.15 | Oct 16, 2017 | $ | 1,241.60 | Dec 17, 2017 | $ | 1,296.50 | Dec 29, 2017 | |||||||||||
Last | |||||||||||||||
End of | business | ||||||||||||||
Period | Average | High | Date | Low | Date | period | day (1) | ||||||||
Three months to March 31, 2020 | $ | 1,582.80 | $ | 1,683.65 | Mar 6, 2020 | $ | 1,474.25 | Mar 19, 2020 | $ | 1,608.95 | Mar 31, 2020 | ||||
Three months to June 30, 2020 | $ | 1,711.13 | $ | 1,771.60 | Jun 29, 2020 | $ | 1,576.55 | Apr 1, 2020 | $ | 1,768.10 | Jun 30, 2020 | ||||
Three months to September 30, 2020 | $ | 1,908.56 | $ | 2,067.15 | Aug 6, 2020 | $ | 1,771.05 | July 1, 2020 | $ | 1,886.90 | Sep 30, 2020 | ||||
Three months to December 31, 2020 | $ | 1,874.23 | $ | 1,940.80 | Nov 6, 2020 | $ | 1,762.55 | Nov 30, 2020 | $ | 1,891.10 | Dec 31, 2020 | (2) | |||
Three months to March 31, 2021 | $ | 1,794.01 | $ | 1,943.20 | Jan 4, 2021 | $ | 1,683.95 | Mar 30, 2021 | $ | 1,691.05 | Mar 31, 2021 | ||||
Three months to June 30, 2021 | $ | 1,816.48 | $ | 1,902.75 | Jun 2, 2021 | $ | 1,726.05 | Apr 1, 2021 | $ | 1,763.15 | Jun 30, 2021 | ||||
Three months to September 30, 2021 | $ | 1,789.52 | $ | 1,829.30 | Jul 29, 2021 | $ | 1,723.35 | Aug 10, 2021 | $ | 1,742.80 | Sept 30, 2021 | ||||
Three months to December 31, 2021 | $ | 1,795.25 | $ | 1,864.90 | Nov 17, 2021 | $ | 1,753.20 | Oct 5, 2021 | $ | 1,820.10 | Dec 31, 2021 | (2) | |||
Three months to March 31, 2022 | $ | 1,877.16 | $ | 2,039.05 | Mar 8, 2022 | $ | 1,788.15 | Jan 28, 2022 | $ | 1,942.15 | Mar 31, 2022 | ||||
Three months to June 30, 2022 | $ | 1,870.58 | $ | 1,976.75 | Apr 13, 2022 | $ | 1,809.50 | May 16, 2022 | $ | 1,817.00 | Jun 30, 2022 | ||||
Three months to September 30, 2022 | $ | 1,728.91 | $ | 1,808.40 | Jul 4, 2022 | $ | 1,634.30 | Sep 27, 2022 | $ | 1,671.75 | Sep 30, 2022 | ||||
Three months to December 31, 2022 | $ | 1,725.85 | $ | 1,823.55 | Dec 13, 2022 | $ | 1,628.75 | Nov 3, 2022 | $ | 1,812.35 | Dec 30, 2022 | (2) | |||
Twelve months ended December 31, 2020 | $ | 1,769.50 | $ | 2,067.15 | Aug 6, 2020 | $ | 1,474.25 | Mar 19, 2020 | $ | 1,891.10 | Dec 31, 2020 | (2) | |||
Twelve months ended December 31, 2021 | $ | 1,798.61 | $ | 1,943.20 | Jan 4, 2021 | $ | 1,683.95 | Mar 30, 2021 | $ | 1,820.10 | Dec 31, 2021 | (2) | |||
Twelve months ended December 31, 2022 | $ | 1,800.09 | $ | 2,039.05 | Mar 8, 2022 | $ | 1,628.75 | Nov 3, 2022 | $ | 1,812.35 | Dec 30, 2022 | (2) | |||
June 26, 2018 to December 31, 2022 | $ | 1,636.08 | $ | 2,067.15 | Aug 6, 2020 | $ | 1,178.40 | Aug 17, 2018 | $ | 1,812.35 | Dec 30, 2022 | (2) |
(1) | The end of period gold price is the LBMA Gold Price |
(2) | There was no LBMA Gold Price PM on the |
Quantitative and Qualitative Disclosures About Market Risk |
The Fund
GLDM is a passive investment vehicle. It is not actively managed and is designed to track the Index during periods in which the Index is flat or declining as well as when the Index is rising. Accordingly, fluctuationsFluctuations in the value of gold bullion and/or the value of USD relative to the Reference Currencies will affect the value of Shares which are designed to reflect the Shares.performance of the price of gold bullion, less GLDM’s expenses.
Controls and Procedures |
Disclosure Controls and Procedures
The duly authorized officers of the Sponsor, performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, have evaluated the effectiveness of the Trust’s and the Fund’s disclosure controls and procedures, and have concluded that the
disclosure controls and procedures of the Trust and the Fund were effective as of the end of the period covered by this report. Such disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are recorded, processed, summarized and reported, within the time period specified in the applicable rules and forms, and that such information is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, and to the Audit Committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.
The duly authorized officers of the Sponsor, performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, have evaluated the effectiveness of GLDM’s disclosure controls and procedures, and have concluded that the disclosure controls and procedures of GLDM were effective as of the end of the period covered by this report. Such disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Trust files or submits under the Exchange Act on behalf of GLDM are recorded, processed, summarized and reported, within the time period specified in the applicable rules and forms, and that such information is accumulated and communicated to the duly authorized officers of the Sponsor performing functions equivalent to those a principal executive officer and principal financial officer of the Trust would perform if the Trust had any officers, and to the Audit Committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.
Internal Control overOver Financial Reporting
There has been no change in the internal control over financial reporting of the Trust or the Fund that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.
There has been no change in the internal control over financial reporting of GLDM that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, GLDM’s internal control over financial reporting.
Legal Proceedings |
None.
Risk Factors |
There have been no material changes to
You should carefully consider the Risk Factors previously disclosedfactors discussed in the Trust’sPart I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal periodyear ended September 30, 2017,2022, which report was filed with the U.S. Securities and Exchange Commission on November 29, 2017. You should carefully consider the risks described under “Risk Factors”could materially affect our business, financial condition or future results. There have been no material changes in our Form 10-K andrisk factors from those disclosed in our prospectus dated December 29, 2017, which was filed with the U.S. Securities and Exchange Commission on December 14, 2017 as part of Post-Effective Amendment No. 1 to the Trust’s registration statement2022 Annual Report on Form S-1 (file number 333-206640). 10-K.
The risks described in our Annual Report onForm 10-K are not the only risks facing the Fund and Trust. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Unregistered Sales of Equity Securities and Use of Proceeds |
a) | None. |
b) | Not applicable. |
c) | Since GLDM commenced operations on June 26, 2018, and in the period from then to December 31, 2022, 360,100,000 Shares (3,601 Creation Units) were created in exchange for 4,188,179.2 ounces of gold and 100,500,000 Shares (1,005 Creation Units) were redeemed in exchange for 1,335,243.7 ounces of gold. |
Total Number of | Average Ounces of | |||
Shares | Gold | |||
Period | Redeemed | Per Share | ||
10/1/22 to 10/31/22 | 2,400,000 | 0.01986 | ||
11/1/22 to 11/30/22 | 3,600,000 | 0.01985 | ||
12/1/22 to 12/31/22 | 4,900,000 | 0.01985 | ||
Total | 10,900,000 | 0.01985 |
Defaults Upon Senior Securities |
None.
Mine Safety Disclosures |
Not applicable.
Other Information |
None.
|
None.
SeeThe exhibits listed on the accompanying Exhibit Index, below, which isand such Exhibit Index, are filed or incorporated by reference herein.
EXHIBIT INDEX
Pursuant to Item 601 ofRegulation S-KEXHIBITINDEX
Exhibit No. | Description of Exhibit | |
31.1 | ||
31.2 | ||
| | ||
32.1 | ||
| | ||
32.2 | ||
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
104.1 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |
* | Pursuant to Rule 406T of RegulationS-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrantRegistrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated thereunto duly authorized.
WGC USA Asset Management Company, LLC | |||
Sponsor of the World | |||
(Registrant) | |||
By: | /s/ Joseph | ||
Joseph | |||
Principal Executive | |||
| By: | /s/ Amanda Krichman | ||
| Amanda Krichman | |||
| Principal Financial | |||
Date: February 6, 20189, 2023
* | The |
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