Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 28, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-235913 | |
Entity Registrant Name | Wilshire wShares Enhanced Gold Trust | |
Entity Central Index Key | 0001799858 | |
Entity Tax Identification Number | 84-6953191 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 2 Park Avenue | |
Entity Address, Address Line Two | 20th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10016 | |
City Area Code | 917 | |
Local Phone Number | 671-9097 | |
Title of 12(b) Security | Units of Beneficial Interest | |
Trading Symbol | WGLD | |
Security Exchange Name | NYSEArca | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 100,001 |
Statements of Financial Conditi
Statements of Financial Condition (unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | ||
Assets | ||||
Investment in gold, at fair value (cost $1,706,797 and $-, respectively) | $ 1,624,720 | |||
Cash | 259 | 18 | ||
Gold receivable | 26,802 | |||
Prepaid asset | 58,582 | |||
Total assets | 1,710,363 | 18 | ||
Liabilities | ||||
Sponsor’s fee payable | 961 | |||
Total liabilities | 961 | |||
Net assets | $ 1,709,402 | $ 18 | [1] | |
Shares issued and outstanding | [2] | 100,001 | 1 | |
Net asset value per Share | $ 17.09 | $ 18 | [3] | |
[1] | The amount represents the initial deposit. | |||
[2] | Authorized share capital is unlimited 0.00 | |||
[3] | The amount represents the initial deposit. |
Statements of Financial Condi_2
Statements of Financial Condition (unaudited) (Parenthetical) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / shares | |
Investment Company [Abstract] | |
Investment in gold, cost | $ | $ 1,706,797 |
Authorized share capital | Unlimited |
Par value (in dollars per share) | $ / shares | $ 0 |
Schedules of Investment (unaudi
Schedules of Investment (unaudited) | Mar. 31, 2021USD ($)oz | Dec. 31, 2020USD ($)oz | |
Investment in gold | oz | 960.776 | ||
Cost | $ 1,706,797 | ||
Fair Value | $ 1,624,720 | ||
% of Net Assets | 95.05% | 0.00% | |
Other assets in excess of liabilities | $ 84,682 | $ 18 | |
Other assets in excess of liabilities, % of Net Assets | 4.95% | 100.00% | |
Net Assets | $ 1,709,402 | $ 18 | [1] |
Net Assets, % of Net Assets | 100.00% | 100.00% | |
Gold, Ounces | |||
Investment in gold | oz | 960.776 | ||
Cost | $ 1,706,797 | ||
Fair Value | $ 1,624,720 | ||
% of Net Assets | 95.05% | 0.00% | |
[1] | The amount represents the initial deposit. |
Statement of Operations (unaudi
Statement of Operations (unaudited) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Expenses | |
Sponsor’s fee | $ 1,313 |
Organizational fee | 6,368 |
Total expenses | 7,681 |
Net investment loss | (7,681) |
Net realized and change in unrealized gain (loss) on investment in gold | |
Net realized gain (loss) from gold sold to pay expenses | (858) |
Net change in unrealized appreciation (depreciation) on investment in gold | (82,077) |
Net realized and change in unrealized gain (loss) from investment in gold | (82,935) |
Net income (loss) | $ (90,616) |
Statement of Cash Flows (unaudi
Statement of Cash Flows (unaudited) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Cash Flows from Operating Activities: | |
Net income (loss) | $ (90,616) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |
Value of gold received for creation of Shares | (1,734,457) |
Value of gold distributed for the redemption of Shares | |
Proceeds from sales of gold to pay expenses | 26,802 |
Net realized gain (loss) from gold sold to pay expenses | 858 |
Net change in unrealized appreciation (depreciation) on investment in gold | 82,077 |
(Increase) decrease in gold receivable | (26,802) |
(Increase) decrease in prepaid asset | (58,582) |
Increase (decrease) in Sponsor fee payable | 961 |
Net cash provided by (used in) operating activities | (1,799,759) |
Cash Flows from Financing Activities: | |
Creation of Shares | 1,800,000 |
Redemption of Shares | |
Net cash provided by (used in) financing activities | 1,800,000 |
Net Increase (Decrease) in Cash | 241 |
Cash beginning of period | 18 |
Cash end of period | $ 259 |
Statement of Change in Net Asse
Statement of Change in Net Assets (unaudited) | 3 Months Ended | |
Mar. 31, 2021USD ($) | ||
Investment Company [Abstract] | ||
Net assets, beginning of period | $ 18 | [1] |
Creation of (100,000) Shares | 1,800,000 | |
Redemption of (-) Shares | ||
Net investment loss | (7,681) | |
Net realized gain (loss) from gold sold to pay expenses | (858) | |
Net change in unrealized appreciation (depreciation) on investment in gold | (82,077) | |
Net assets, end of period | $ 1,709,402 | |
[1] | The amount represents the initial deposit. |
Statement of Change in Net As_2
Statement of Change in Net Assets (unaudited) (Parenthetical) - shares | Feb. 17, 2021 | Mar. 31, 2021 |
Statement of Stockholders' Equity [Abstract] | ||
Creation of shares (in shares) | 100,000 | 100,000 |
Financial Highlights (unaudited
Financial Highlights (unaudited) | 3 Months Ended | |
Mar. 31, 2021$ / shares | ||
Fair Value Disclosures [Abstract] | ||
Net asset value per Share, beginning of period | $ 18 | [1] |
Net investment loss | (0.08) | [2] |
Net realized and unrealized gain (loss) on investment in gold | (0.83) | |
Net change in net assets from operations | (0.91) | |
Net asset value per Share, end of period | $ 17.09 | |
Total return, at net asset value | (5.06%) | [3] |
Ratio to average net assets | ||
Net investment loss | (3.80%) | [4] |
Net expenses | 3.80% | [4] |
[1] | The amount represents the initial deposit. | |
[2] | Calculated using average Shares outstanding. | |
[3] | Not annualized. | |
[4] | Annualized. |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | 1. ORGANIZATION The Wilshire wShares Enhanced Gold Trust (the “Trust”) is an exchange-traded fund formed on January 8, 2020, as a Delaware statutory trust and trades on the NYSE Arca, Inc. (the “Exchange”). The Trust operates pursuant to a trust agreement, dated as of January 8, 2020, as amended by the First Amendment to the Trust Agreement, dated as of August 24, 2020, and further amended and restated on December 17, 2020 (the “Trust Agreement”) between Wilshire Phoenix Funds LLC, a Delaware limited liability company (the “Sponsor”), and Delaware Trust Company (the “Trustee”). The Trust is not registered as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and is not a commodity pool for purposes of the Commodity Exchange Act (“CEA”). The Trust issues shares (the “Shares”), which represent units of fractional undivided beneficial interest in the Trust. The Trust will have no assets other than (a) physical gold held by the Trust (“Physical Gold”), and (b) cash. The Trust’s performance, whether positive or negative, will be driven primarily by its investments in Physical Gold. The Trust’s Physical Gold is carried, for financial statement purposes, at fair value, as required by accounting principles generally accepted in the United States (“U.S. GAAP”). The Trust’s Net Asset Value (the “NAV”) is determined by the Administrator, in conformity with U.S. GAAP, on each business day as of 4:00 p.m., (New York City time) or as soon thereafter as practicable. The Trust commenced operations on February 18, 2021. The investment objective of the Trust is for the Shares to closely reflect the Wilshire Gold Index (the “Index”), less the Trust’s liabilities and expenses. The objective of the Index is to reduce the risk-profile typically associated with the purchase of gold, as measured by the realized volatility of the LBMA Gold Price PM, while maintaining the correlative benefits of gold versus the S&P 500 ® JPMorgan Chase Bank, N.A. is the gold custodian of the Trust (the “Gold Custodian”). Foreside Fund Services, LLC is the marketing agent for the Shares (the “Marketing Agent”). The Bank of New York Mellon is the custodian for cash (in such capacity, the “Cash Custodian”), the administrator (in such capacity, the “Administrator”), and the transfer agent (in such capacity, the “Transfer Agent”) of the Trust. Exchange Traded Concepts, LLC has been appointed as a representative (in such capacity, the “Representative”) for the purposes of performing certain operational functions, which include effecting the monthly rebalances of the Trust’s assets on the last business day of each month (each, a “Rebalance Date”), and effecting creations, redemptions, sales and other transactions on behalf of the Trust. All net proceeds from the sale of the Shares will be used to purchase Physical Gold to the extent required to track the Index’s allocation to Physical Gold and to pay the expenses of the Trust. Shares of the Trust are listed on the Exchange under the ticker symbol “WGLD”. The market price of the Shares may be different from the NAV per Share. Shares may be purchased from the Trust only by certain eligible financial institutions called Authorized Participants and only in one or more blocks of 10,000 The Trust is an “emerging growth company” as that term is used in the Securities Act of 1933, as amended (the “Securities Act”), and, as such, the Trust may elect to comply with certain reduced public company reporting requirements. Virtu Financial BD LLC, the initial Authorized Participant, purchased 100,000 18.00 The statement of financial condition and schedule of investments at March 31, 2021 and the statements of operations, change in net assets, and cash flows for the period ended March 31, 2021, have been prepared on behalf of the Trust and are unaudited. In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and results of operations for the period ended March 31, 2021, have been made. In addition, interim period results are not necessarily indicative of results for a full-year period. The statements of operations, changes in net assets, and cash flows for the period January 8, 2020 through March 31, 2020 are not included as the Trust did not commence operations until February 18, 2021. The fiscal year of the Trust is December 31 st |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES In preparing financial statements in conformity with U.S. GAAP, management of the Sponsor makes estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amount of revenue and expenses reported during the period. Actual results could differ from these estimates. The following is a summary of significant accounting policies followed by the Trust. 2.1. Basis of Presentation The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services - Investment Companies, and has concluded that only for financial reporting purposes, the Trust is classified as an Investment Company (as defined in ASC 946). The Trust is not registered as an investment company under the Investment Company Act and is not required to register under such act. 2.2. Valuation of Gold The Trust follows the provisions of FASB ASC 820, Fair Value Measurements (“ASC 820”). ASC 820 provides guidance for determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Administrator generally values the Physical Gold held by the Trust using that day’s LBMA Gold Price PM. If there is no LBMA Gold Price PM on any day, the Administrator is authorized to use that day’s LBMA Gold Price AM, or the most recently announced LBMA Gold Price PM or LBMA Gold Price AM. LBMA Gold Price is the price per troy ounce, in U.S. dollars, of unallocated gold delivered in London determined by IBA following an electronic auction consisting of one or more 30-second rounds starting at 10:30 a.m. (London time) (in the case of LBMA Gold Price AM) or 3:00 p.m. (London time) (in the case of LBMA Gold Price PM) on each day that the London gold market is open for business, and published shortly thereafter. At the start of each round of auction, IBA publishes a price for that round. Participants then have 30 seconds to enter, change or cancel their orders ( i.e i.e 10,000 Neither the Trustee nor the Sponsor are liable to any person for the determination that the most recently announced LBMA PM Gold Price (or other benchmark price) is not appropriate as a basis for evaluation of the gold held or receivable by the Trust or for any determination as to the alternative basis for evaluation, provided that such determination is made in good faith. Once the value of the Trust’s Physical Gold has been determined, the Administrator subtracts all accrued expenses and liabilities of the Trust from the total value of the Physical Gold and all other assets of the Trust. The resulting figure is the NAV of the Trust. The Administrator determines the NAV by dividing the NAV of the Trust by the number of Shares outstanding on the day the computation is made. ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. Level 2: Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data. Level 3: Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available. The Sponsor categorizes the Trust’s investment in gold Level 1 Level 2 Level 3 Investment in gold $ 1,624,720 $ — $ — Total $ 1,624,720 $ — $ — 2.3. Expenses The Trust pays the Sponsor a fee that will accrue daily at an annualized rate equal to 0.65 The following ordinary and recurring fees of the Trust will be paid by the Administrator out of the Sponsor’s Fee: the Administrator Fee, the Gold Custodian Fee, the Cash Custodian Fee, the Transfer Agent Fee, the Representative Fee, the Trustee Fee, the Partnership Representative Fee, the Trust’s audit fees (including any fees and expenses associated with tax preparation) and up to $ 100,000 To pay the Sponsor’s Fee, the Cash Custodian will withdraw from the cash on deposit in the cash account an amount of U.S. dollars equal to the Sponsor’s Fee, determined as described above. Any Sponsor-Paid Expenses will be netted out of the Sponsor’s Fee, and the Cash Custodian will, pursuant to the instruction of the Administrator, directly pay the recipients of such amounts. After netting such Sponsor-Paid Expenses, the Administrator shall instruct the Cash Custodian to pay the remaining amount of the Sponsor’s Fee to the Sponsor. The Sponsor, from time to time, may waive all or a portion of the Sponsor’s Fee in its sole discretion. The Trust is required to pay certain other fees and expenses that are not contractually assumed by the Sponsor, including, but not limited to, any fees and expenses associated with the Trust’s monthly rebalancing between Physical Gold and cash, any other fees (including commissions and/or exchange fees) associated with the buying and selling of Physical Gold for the Trust, fees and expense reimbursements due to the Marketing Agent, the Trust’s regulatory fees and expenses (including any filing, application or license fees), printing and mailing costs, costs of maintaining the Trust’s website, the Trust’s legal fees and expenses to the extent they exceed $ 100,000 2.4. Gold Receivable or Payable and Revenue Recognition Policy Gold receivable or payable represents the quantity of gold covered by contractually binding orders for the creation or redemption of Shares respectively, where the gold has not yet been transferred to or from the Trust’s account. Gold receivable or payable also represents the quantity of gold yet to be received from or distributed to the Gold Custodian in conjunction with a rebalance transaction. Generally, ownership of the gold is transferred within two business days of the trade date. The Sponsor, on each Rebalance Date, shall instruct the Representative to purchase and/or sell Physical Gold. In addition, the Administrator, acting pursuant to instructions from the Sponsor, shall, on the Rebalance Date, instruct the Cash Custodian to pay amounts due and payable by the Trust as of the Determination Date. When selling gold to pay expenses, the Representative will endeavor to sell the smallest amount of gold needed to pay expenses to minimize the Trust’s holdings of assets other than gold. Unless otherwise directed by the Sponsor, the Representative will sell gold to the Custodian at the next LBMA Gold Price PM following the sale 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 expenses on the statements of operations. 2.5. Creations and Redemptions of Shares The Trust creates and redeems Shares from time to time, but only in one or more Creation Units. A Creation Unit is a block of 10,000 500 Authorized Participants must be (i) registered broker-dealers or other securities market participants, such as banks and other financial institutions, which are not required to register as broker-dealers to engage in securities transactions, and (ii) participants in the Depository Trust Company (the “DTC”). To become an Authorized Participant, a person must enter into an Authorized Participant Agreement with the Trust and the Sponsor. The Authorized Participant Agreement sets forth the procedures for the creation and redemption of Creation Units and for the payment of cash required for such creations and redemptions. The Sponsor may delegate its duties and obligations under the Authorized Participant Agreement to the Marketing Agent, the Administrator, or the Transfer Agent, without consent from any Shareholder or Authorized Participant. The Authorized Participant Agreement may be amended by the Sponsor only with the consent of the Authorized Participant, while the procedures attached thereto may be amended with notice to the Authorized Participant by following the procedures specified in the Authorized Participant Agreement. Shareholder consent is not required in either case. To compensate the Transfer Agent for services in processing the creation and redemption of Creation Units, an Authorized Participant is required to pay a transaction fee of $ 500 1 There were 100,001 Changes in the Shares Shares Amount Balance at January 1, 2021 1 $ 18 Creation of Shares 100,000 1,800,000 Redemption of Shares — — Balance at March 31, 2021 100,001 $ 1,800,018 2.6. Organizational Costs The costs of the Trust’s organization were borne directly by the Sponsor. The Trust is obligated to pay, or reimburse the Sponsor for, Additional Trust Expenses and any fees and expenses that are specified in the Trust Agreement as payable by the Trust. 2.7. Income Taxes The Trust is classified as a “partnership” for United States federal income tax purposes. As a result, the Trust itself is not subject to United States federal income tax. Instead, the Trust’s income, gain, losses, and expenses will “flow through” to the Shareholders, and the Trustee reports these to the Internal Revenue Service on that basis. The Sponsor evaluates tax positions taken or expected to be taken in the course of preparing the Trust’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet that threshold would be recorded as an expense in the current year. The Trust is required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. As of March 31, 2021, no tax years are open for examination. There is no examination in progress at period end. |
INVESTMENT IN GOLD
INVESTMENT IN GOLD | 3 Months Ended |
Mar. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
INVESTMENT IN GOLD | 3. INVESTMENT IN GOLD The following represents the changes in fine ounces of gold and the respective fair value Amount in fine ounces Amount in US$ Balance at January 1, 2021 — $ — Gold received for creation of Shares 976.626 1,800,018 Gold distributed for redemption of Shares — — Value of gold sold to pay expenses — (7,681 ) Net realized gain (loss) from gold sold to pay expenses (15.850 ) (858 ) Change in unrealized appreciation (depreciation) on investment in gold — (82,077 ) Balance at March 31, 2021 960.776 $ 1,709,402 There were no investments held during 2020. |
RELATED PARTIES _ SPONSOR, TRUS
RELATED PARTIES – SPONSOR, TRUSTEE, GOLD CUSTODIAN, CASH CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES – SPONSOR, TRUSTEE, GOLD CUSTODIAN, CASH CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT | 4. RELATED PARTIES – SPONSOR, TRUSTEE, GOLD CUSTODIAN, CASH CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT The Sponsor was formed on May 14, 2018, and established, coordinated, and paid the organizational expenses of the Trust. The Sponsor, together with the Administrator, the Gold Custodian, the Cash Custodian, the Transfer Agent, the Representative, and their respective agents are generally responsible for the administration of the Trust under the provisions of their respective governing agreements. Some of the responsibilities of the Sponsor include (i) selecting the Trust’s service providers and, from time to time, engaging additional, successor or replacement service providers, which shall also include negotiating each service provider agreement and related fees on behalf of the Trust, (ii) facilitating registration of the Shares in book-entry form to be held in the name of Cede & Co. at the facilities of DTC in consultation with the Transfer Agent, and (iii) performing such other services as the Sponsor believes the Trust may require. The Sponsor is generally not involved in the day-to-day activities of the Trust. The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose of satisfying the requirement of Section 3807(a) of the Delaware Statutory Trust Act (“DSTA”) that the Trust have at least one trustee with a principal place of business in the State of Delaware. The Trustee’s duties and liabilities with respect to the offering of Shares and management of the Trust are limited to its express obligations under the Trust Agreement. The Trustee shall not be liable under any circumstances, except for its own willful misconduct, bad faith, or gross negligence with respect to its express duties under the Trust Agreement. The Trustee will have no obligation to monitor or supervise the obligations of the Sponsor, Transfer Agent, Administrator, Gold Custodian, Cash Custodian, or any other person. The Trustee will be compensated by the Trust, out of the Sponsor’s Fee, for the Trustee’s fees. The Trustee will be reimbursed by the Trust for reasonable legal expenses it incurs in connection with consultation with its counsel (who may be counsel for the Sponsor or the Trustee) in relation to indemnification under the Trust Agreement. The Gold Custodian serves as a custodian on the Trust’s behalf, and the Physical Gold in the Trust’s account maintained by the Gold Custodian is considered an asset that remains the Trust’s property at all times. The Gold Custodian is responsible for receiving and safekeeping the Trust’s Physical Gold. The Gold Custodian will store Physical Gold in its own vaulting facilities, generally in London, New York, or such other locations where the Gold Custodian may maintain vaulting facilities from times to time. The Gold Custodian may appoint sub-custodians from time to time for the custody and safekeeping of Physical Gold, but the Gold Custodian remains liable for the custody and safekeeping of Physical Gold and for any loss suffered by the Trust as a result of any act or omission or insolvency of any sub-custodian. The Gold Custodian has agreed to maintain insurance in support of its custodial obligations under the Gold Custodian Agreement, including covering any loss of Physical Gold held in allocated form. Under the Cash Custody Agreement, the Cash Custodian will be responsible for maintaining the cash account in which the Cash Custodian will hold U.S. dollars in the name of the Trust. The Cash Custodian will be compensated out of the Sponsor’s Fee for the Cash Custodian’s services under the Cash Custody Agreement. The Administration Agreement establishes the rights and responsibilities of the Administrator and the Trust with respect to the administration, accounting, and recordkeeping of the Trust. The responsibilities of the Administrator will include duties and obligations set forth in the Administration Agreement in connection with (i) the Trust’s payment of fees and expenses on each Rebalance Date, (ii) providing information to the Sponsor in order for the Sponsor to determine the monthly rebalancing of the Trust’s holdings in Physical Gold and cash on each Rebalance Date, (iii) evaluating the Physical Gold holdings and the Cash, determining the Trust’s NAV and the NAV per Share and preparing daily reports, and (iv) maintaining books and records on behalf of the Trust. The Administrator will prepare the Trust’s required filings under the Exchange Act. The Administrator will be compensated by the Trust, out of the Sponsor’s Fee, for the Administrator’s fees. The Transfer Agent records the ownership of the Shares on the books and records of the Trust and coordinates with the Marketing Agent and DTC as necessary. The Transfer Agent will credit or debit the number of Shares owned by holders of record. The Transfer Agent will (i) facilitate purchases and redemptions of Creation Units to be held in the name of DTC or its nominee, Cede & Co., at the facilities of DTC; (ii) prepare and transmit by means of DTC’s book-entry system payments on or with respect to the Shares declared by the Trust; (iii) maintain the record of the name and address of the Shareholder and the number of Shares issued by the Trust and held by the Shareholder; (iv) record the issuance of Shares of the Trust and maintain a record of the total number of Shares of the Trust which are outstanding, and, based upon data provided to it by the Trust, the total number of authorized Shares; (v) prepare and transmit to the Trust and the Administrator and to any applicable securities exchange information with respect to purchases and redemptions of Shares; (vi) extend the voting rights to the Shareholder for extension by DTC to DTC participants and the beneficial owners of Shares in accordance with policies and procedures of DTC for book-entry only securities; and (vii) maintain books and records related to its activities on behalf of the Trust. The Transfer Agent will also perform the customary services of a transfer agent including, but not limited to, maintaining the accounts of the Shareholders. The Transfer Agent will be compensated by the Trust, out of the Sponsor’s Fee, for the Transfer Agent’s fees. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF RISK | 5. CONCENTRATION OF RISK The Trust’s sole business activity is the investment in gold bullion and cash to track the Index, less the Trust’s liabilities and expenses. Several factors could affect the price of gold: (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, and new production projects; (ii) investors’ expectations regarding future inflation rates; (iii) currency exchange rate volatility; (iv) interest rate volatility; and (v) political, economic, global or regional incidents. In addition, 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 Trust’s financial position and results of operations. |
INDEMNIFICATION
INDEMNIFICATION | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
INDEMNIFICATION | 6. INDEMNIFICATION The Sponsor and its affiliates, and their respective members, managers, directors, officers, employees, agents and controlling persons (each a “Sponsor Indemnified Party”), will be indemnified by the Trust and held harmless against any loss, judgment, liability, claim, suit, penalty, tax, cost, amount paid in settlement of any claims sustained by it or expense incurred by it arising out of or in connection with the performance of its obligations under the Trust Agreement and under each other agreement entered into by the Sponsor in furtherance of the administration of the Trust, including any costs and expenses incurred by the Sponsor in defending itself against any claim or liability in its capacity as Sponsor; provided that (i) such loss was not the direct result of gross negligence, bad faith or willful misconduct on the part of the Sponsor or a Sponsor Indemnified Party, and (ii) any such indemnification will be recoverable only from the assets of the Trust. Any indemnifiable amounts payable to such indemnified persons may be payable in advance or shall be secured by a lien on the Trust. The Trustee and any of the officers, directors, affiliates, employees and agents of the Trustee (each, a “Trustee Indemnified Party” shall be indemnified by the Trust and held harmless against any loss, damage, liability (including liability under state or federal securities laws), claim, action, suit, cost, expense, disbursement (including the reasonable fees and expenses of counsel generally and in connection with its enforcement of its indemnification rights), tax or penalty of any kind and nature whatsoever, to the extent arising out of, imposed upon or asserted at any time against such indemnified person in connection with the execution or delivery of the Trust Agreement, the performance of its obligations under the Trust Agreement, the creation, operation or termination of the Trust or the transactions contemplated therein; provided, however, that (i) the Trust shall not be required to indemnify any such indemnified person for any such expenses which are a result of the willful misconduct, bad faith or gross negligence related to the express duties of the Trustee or Trustee Indemnified Party, and (ii) any such indemnification will be recoverable only from the assets of the Trust. The obligations of the Trust to indemnify such indemnified persons under the Trust Agreement shall survive the resignation or removal of the Trustee and the termination of the Trust Agreement. Any indemnifiable amounts payable to such indemnified persons may be payable in advance or shall be secured by a lien on the Trust. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2.1. Basis of Presentation The Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services - Investment Companies, and has concluded that only for financial reporting purposes, the Trust is classified as an Investment Company (as defined in ASC 946). The Trust is not registered as an investment company under the Investment Company Act and is not required to register under such act. |
Valuation of Gold | 2.2. Valuation of Gold The Trust follows the provisions of FASB ASC 820, Fair Value Measurements (“ASC 820”). ASC 820 provides guidance for determining fair value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Administrator generally values the Physical Gold held by the Trust using that day’s LBMA Gold Price PM. If there is no LBMA Gold Price PM on any day, the Administrator is authorized to use that day’s LBMA Gold Price AM, or the most recently announced LBMA Gold Price PM or LBMA Gold Price AM. LBMA Gold Price is the price per troy ounce, in U.S. dollars, of unallocated gold delivered in London determined by IBA following an electronic auction consisting of one or more 30-second rounds starting at 10:30 a.m. (London time) (in the case of LBMA Gold Price AM) or 3:00 p.m. (London time) (in the case of LBMA Gold Price PM) on each day that the London gold market is open for business, and published shortly thereafter. At the start of each round of auction, IBA publishes a price for that round. Participants then have 30 seconds to enter, change or cancel their orders ( i.e i.e 10,000 Neither the Trustee nor the Sponsor are liable to any person for the determination that the most recently announced LBMA PM Gold Price (or other benchmark price) is not appropriate as a basis for evaluation of the gold held or receivable by the Trust or for any determination as to the alternative basis for evaluation, provided that such determination is made in good faith. Once the value of the Trust’s Physical Gold has been determined, the Administrator subtracts all accrued expenses and liabilities of the Trust from the total value of the Physical Gold and all other assets of the Trust. The resulting figure is the NAV of the Trust. The Administrator determines the NAV by dividing the NAV of the Trust by the number of Shares outstanding on the day the computation is made. ASC 820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. Level 2: Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data. Level 3: Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available. The Sponsor categorizes the Trust’s investment in gold Level 1 Level 2 Level 3 Investment in gold $ 1,624,720 $ — $ — Total $ 1,624,720 $ — $ — |
Expenses | 2.3. Expenses The Trust pays the Sponsor a fee that will accrue daily at an annualized rate equal to 0.65 The following ordinary and recurring fees of the Trust will be paid by the Administrator out of the Sponsor’s Fee: the Administrator Fee, the Gold Custodian Fee, the Cash Custodian Fee, the Transfer Agent Fee, the Representative Fee, the Trustee Fee, the Partnership Representative Fee, the Trust’s audit fees (including any fees and expenses associated with tax preparation) and up to $ 100,000 To pay the Sponsor’s Fee, the Cash Custodian will withdraw from the cash on deposit in the cash account an amount of U.S. dollars equal to the Sponsor’s Fee, determined as described above. Any Sponsor-Paid Expenses will be netted out of the Sponsor’s Fee, and the Cash Custodian will, pursuant to the instruction of the Administrator, directly pay the recipients of such amounts. After netting such Sponsor-Paid Expenses, the Administrator shall instruct the Cash Custodian to pay the remaining amount of the Sponsor’s Fee to the Sponsor. The Sponsor, from time to time, may waive all or a portion of the Sponsor’s Fee in its sole discretion. The Trust is required to pay certain other fees and expenses that are not contractually assumed by the Sponsor, including, but not limited to, any fees and expenses associated with the Trust’s monthly rebalancing between Physical Gold and cash, any other fees (including commissions and/or exchange fees) associated with the buying and selling of Physical Gold for the Trust, fees and expense reimbursements due to the Marketing Agent, the Trust’s regulatory fees and expenses (including any filing, application or license fees), printing and mailing costs, costs of maintaining the Trust’s website, the Trust’s legal fees and expenses to the extent they exceed $ 100,000 |
Gold Receivable or Payable and Revenue Recognition Policy | 2.4. Gold Receivable or Payable and Revenue Recognition Policy Gold receivable or payable represents the quantity of gold covered by contractually binding orders for the creation or redemption of Shares respectively, where the gold has not yet been transferred to or from the Trust’s account. Gold receivable or payable also represents the quantity of gold yet to be received from or distributed to the Gold Custodian in conjunction with a rebalance transaction. Generally, ownership of the gold is transferred within two business days of the trade date. The Sponsor, on each Rebalance Date, shall instruct the Representative to purchase and/or sell Physical Gold. In addition, the Administrator, acting pursuant to instructions from the Sponsor, shall, on the Rebalance Date, instruct the Cash Custodian to pay amounts due and payable by the Trust as of the Determination Date. When selling gold to pay expenses, the Representative will endeavor to sell the smallest amount of gold needed to pay expenses to minimize the Trust’s holdings of assets other than gold. Unless otherwise directed by the Sponsor, the Representative will sell gold to the Custodian at the next LBMA Gold Price PM following the sale 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 expenses on the statements of operations. |
Creations and Redemptions of Shares | 2.5. Creations and Redemptions of Shares The Trust creates and redeems Shares from time to time, but only in one or more Creation Units. A Creation Unit is a block of 10,000 500 Authorized Participants must be (i) registered broker-dealers or other securities market participants, such as banks and other financial institutions, which are not required to register as broker-dealers to engage in securities transactions, and (ii) participants in the Depository Trust Company (the “DTC”). To become an Authorized Participant, a person must enter into an Authorized Participant Agreement with the Trust and the Sponsor. The Authorized Participant Agreement sets forth the procedures for the creation and redemption of Creation Units and for the payment of cash required for such creations and redemptions. The Sponsor may delegate its duties and obligations under the Authorized Participant Agreement to the Marketing Agent, the Administrator, or the Transfer Agent, without consent from any Shareholder or Authorized Participant. The Authorized Participant Agreement may be amended by the Sponsor only with the consent of the Authorized Participant, while the procedures attached thereto may be amended with notice to the Authorized Participant by following the procedures specified in the Authorized Participant Agreement. Shareholder consent is not required in either case. To compensate the Transfer Agent for services in processing the creation and redemption of Creation Units, an Authorized Participant is required to pay a transaction fee of $ 500 1 There were 100,001 Changes in the Shares Shares Amount Balance at January 1, 2021 1 $ 18 Creation of Shares 100,000 1,800,000 Redemption of Shares — — Balance at March 31, 2021 100,001 $ 1,800,018 |
Organizational Costs | 2.6. Organizational Costs The costs of the Trust’s organization were borne directly by the Sponsor. The Trust is obligated to pay, or reimburse the Sponsor for, Additional Trust Expenses and any fees and expenses that are specified in the Trust Agreement as payable by the Trust. |
Income Taxes | 2.7. Income Taxes The Trust is classified as a “partnership” for United States federal income tax purposes. As a result, the Trust itself is not subject to United States federal income tax. Instead, the Trust’s income, gain, losses, and expenses will “flow through” to the Shareholders, and the Trustee reports these to the Internal Revenue Service on that basis. The Sponsor evaluates tax positions taken or expected to be taken in the course of preparing the Trust’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet that threshold would be recorded as an expense in the current year. The Trust is required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. As of March 31, 2021, no tax years are open for examination. There is no examination in progress at period end. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
The Sponsor categorizes the Trust’s investment in gold as a Level 1 asset within the ASC 820 hierarchy. | The Sponsor categorizes the Trust’s investment in gold Level 1 Level 2 Level 3 Investment in gold $ 1,624,720 $ — $ — Total $ 1,624,720 $ — $ — |
Changes in the Shares for the three months ended March 31, 2021 are: | Changes in the Shares Shares Amount Balance at January 1, 2021 1 $ 18 Creation of Shares 100,000 1,800,000 Redemption of Shares — — Balance at March 31, 2021 100,001 $ 1,800,018 |
INVESTMENT IN GOLD (Tables)
INVESTMENT IN GOLD (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
The following represents the changes in fine ounces of gold and the respective fair value during the three months ended March 31, 2021: | The following represents the changes in fine ounces of gold and the respective fair value Amount in fine ounces Amount in US$ Balance at January 1, 2021 — $ — Gold received for creation of Shares 976.626 1,800,018 Gold distributed for redemption of Shares — — Value of gold sold to pay expenses — (7,681 ) Net realized gain (loss) from gold sold to pay expenses (15.850 ) (858 ) Change in unrealized appreciation (depreciation) on investment in gold — (82,077 ) Balance at March 31, 2021 960.776 $ 1,709,402 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) - $ / shares | Feb. 17, 2021 | Mar. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Block of shares issued | 10,000 | |
Number of shares issued | 100,000 | 100,000 |
Shares issued price per share (in dollars per share) | $ 18 |
The Sponsor categorizes the Tru
The Sponsor categorizes the Trust’s investment in gold as a Level 1 asset within the ASC 820 hierarchy. (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Investment in gold | $ 1,624,720 | |
Fair Value, Inputs, Level 1 [Member] | ||
Investment in gold | 1,624,720 | |
Fair Value, Inputs, Level 2 [Member] | ||
Investment in gold | ||
Fair Value, Inputs, Level 3 [Member] | ||
Investment in gold | ||
Gold, Ounces | ||
Investment in gold | 1,624,720 | |
Gold, Ounces | Fair Value, Inputs, Level 1 [Member] | ||
Investment in gold | 1,624,720 | |
Gold, Ounces | Fair Value, Inputs, Level 2 [Member] | ||
Investment in gold | ||
Gold, Ounces | Fair Value, Inputs, Level 3 [Member] | ||
Investment in gold |
Changes in the Shares for the t
Changes in the Shares for the three months ended March 31, 2021 are: (Details) - USD ($) | Feb. 17, 2021 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | |||
Balance at Beginning (in shares) | [1] | 1 | |
Balance at Beginning | $ 18 | ||
Creation of Shares (in shares) | 100,000 | 100,000 | |
Creation of Shares | $ 1,800,000 | ||
Redemption of Shares (in shares) | |||
Redemption of Shares | |||
Balance at End (in shares) | [1] | 100,001 | |
Balance at End | $ 1,800,018 | ||
[1] | Authorized share capital is unlimited 0.00 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2021USD ($)oztshares | Dec. 31, 2020shares | ||
Sponsor Fee | 0.65% | ||
Maximum sponsor fee for legal expenses | $ | $ 100,000 | ||
Block of shares issued | shares | 10,000 | ||
Transaction fee | $ | $ 500 | ||
Shares outstanding | shares | [1] | 100,001 | 1 |
Gold, Ounces | |||
Threshold for auction imbalance | ozt | 10,000 | ||
[1] | Authorized share capital is unlimited 0.00 |
The following represents the ch
The following represents the changes in fine ounces of gold and the respective fair value during the three months ended March 31, 2021: (Details) | 3 Months Ended |
Mar. 31, 2021USD ($)oz | |
Balance at beginning | |
Balance at beginning | $ | |
Gold received for creation of Shares | $ | 1,800,018 |
Gold distributed for redemption of Shares | $ | |
Value of gold sold to pay expenses | $ | (7,681) |
Net realized gain (loss) from gold sold to pay expenses | $ | (858) |
Change in unrealized appreciation (depreciation) on investment in gold | $ | $ (82,077) |
Balance at end | 960.776 |
Balance at end | $ | $ 1,709,402 |
Gold, Ounces | |
Balance at beginning | |
Gold received for creation of Shares | 976.626 |
Gold distributed for redemption of Shares | |
Value of gold sold to pay expenses | |
Net realized gain (loss) from gold sold to pay expenses | (15.850) |
Change in unrealized appreciation (depreciation) on investment in gold | |
Balance at end | 960.776 |