SPDR Gold Shares is also known as SPDR Gold Trust is part of the SPDR family of exchange-traded funds (ETFs) managed and marketed by State Street Global Advisors.
For a few years, the fund was the second largest exchange traded fund in the world. As of August 2012, it is the second largest exchange traded product in the world.
The exchange traded funds denotes a share of gold bullion, which is unlike many ETFs (exchange traded funds) which represent ownership in a basket of stocks.
SPDR Gold Shares are designed to track the price of a tenth of an ounce of gold. If the share price differs from the gold market price, the fund’s manager exchanges blocks of 100,000 shares for 10,000 ounces of gold. The possibility of such exchanges keeps the ETF price roughly in line with the gold price, although the prices can diverge during each day.
The Trust’s allocated gold bullion is kept in the form of London Good Delivery gold bars (400 oz.) and held by the Custodian, HSBC Bank USA, in its London vault or in the vaults of sub-custodians. The ETF pays an annual expense charge of 0.40% per annum. The ETF has been criticized by Catherine Austin Fitts and Carolyn Betts for its extremely complex structure and prospectus, possible conflict of interest in its relationships with HSBC and JPMorgan Chase which are believed to have large short positions in gold and overall lack of transparency.
Some critics compare the ETF with mortgage-backed securities and collateralized debt obligations. These problems with SPDR Gold Trust are not necessarily unique to the fund, however; as the dominant gold ETF, the fund has received the most extensive analysis.
As of October 28, 2013, the trust had 28,036,311 ounces of vaulted gold in its custody, representing an asset value over $38.14 billion. SPDR Gold Shares is one of the top ten largest holders of gold in the world, behind France and ahead of China.