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iShares Gold Trust
iShares Gold Trust (IAU) is a BlackRock-sponsored physical gold ETF launched in 2010, holding allocated bullion in London vaults with a 0.25% expense...
iShares Gold Trust
iShares Gold Trust (IAU) began trading in January 2010, sponsored by BlackRock as part of its iShares product line. The trust is structured as a grantor trust under the Investment Company Act of 1940, not a mutual fund, meaning it holds physical gold bullion directly and passes through tax treatment as a collectible. BlackRock appointed the Bank of Nova Scotia as custodian for the allocated gold, stored in London vaults. Strategy and deployment: The trust's mandate is purely passive — it buys and holds London Good Delivery gold bars to mirror the daily spot price of gold, less trust expenses. IAU does not trade futures, derivatives, or mining equities; every share represents a fractional interest in physical gold. As of 2025, IAU held roughly 400 tonnes of gold, making it the second-largest gold ETF by physical reserves behind SPDR Gold Shares (GLD). Geographic footprint is limited to London vaults, with custody at Scotiabank and sub-custody via JPMorgan Chase. Scale and structure: IAU maintains an expense ratio of 0.25%, lower than GLD's 0.40%, attracting cost-sensitive retail and advisor allocations. The trust issues and redeems shares through authorized participants (APs) including Goldman Sachs and Citigroup, who deliver or take delivery of physical gold. In 2023, IAU saw net inflows of roughly $1.5B as gold prices rose during banking sector stress, though redemption activity varies inversely with gold price volatility (per Bloomberg, 2023). Structural differentiator: IAU's key differentiator is its trust structure — it qualifies as a Section 851 regulated investment company, avoiding corporate-level taxation while offering direct pass-through of gold price exposure. Unlike gold mining ETFs, IAU has no credit risk or operational leverage; its sole asset is gold bullion. The trust has no board, no employees, and no active management, operated entirely by BlackRock under a trust agreement, which makes it one of the most transparent and minimalist commodity vehicles available.
General information
Firm type
other
Year founded
2010
AUM
Undisclosed
Location
Region
North America
Country
United States
City
San Francisco
Corporate office
San Francisco, CA, United States
Sector focus
Frequently asked questions
How does iShares Gold Trust differ from SPDR Gold Shares (GLD)?
IAU charges a lower expense ratio (0.25% versus GLD's 0.40%) and has a lower share price, making it more accessible to retail investors. Both are physically backed gold ETFs, but IAU is smaller in total assets. The tax treatment is identical — both are grantor trusts subject to collectible capital gains rates.
Does iShares Gold Trust invest in gold futures or mining stocks?
No. IAU holds only physical gold bullion stored in London Good Delivery bars. It does not trade futures, options, mining equities, or any derivative instruments. Shareholders own a proportional claim on the gold in the trust's vaults.
Who holds the gold for iShares Gold Trust?
The gold is held by the Bank of Nova Scotia as custodian, with sub-custody services provided by JPMorgan Chase. All gold is allocated and stored in vaults in London. The trust does not use pooled or unallocated accounts.
Can investors redeem shares for physical gold?
Only authorized participants (APs) — large financial institutions like Goldman Sachs and Citigroup — can redeem shares for physical gold. Retail investors must sell shares on the secondary market through a broker. The trust does not offer physical delivery to individual shareholders.
What is the expense ratio of iShares Gold Trust?
IAU's expense ratio is 0.25% per annum, as of 2025. This covers trust administration, custody, and marketing fees, but not brokerage commissions incurred when buying or selling shares on the exchange.
How is iShares Gold Trust taxed?
IAU is structured as a grantor trust, so investors are treated as owning a direct interest in the gold. Gains are taxed as collectibles at a maximum federal long-term capital gains rate of 28%. Short-term gains are taxed at ordinary income rates. The trust distributes no income — all value accrues through share price appreciation.
Does BlackRock manage iShares Gold Trust actively?
No. The trust is a passive vehicle with no portfolio managers or investment committee. BlackRock serves as sponsor and administrator, executing the trust's mandate to hold gold and adjust share creation/redemption in response to market demand. All operational decisions follow the trust agreement and SEC rules.
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