"IAU is a grantor trust that holds allocated gold bullion in vaults. Each share represents a fractional claim on physical metal, so the price tracks the spot gold market minus the trust's expense ratio, which iShares lists at 0.25%. There is no operating business, no dividend, and no derivative overlay. The return engine is simply the gold price."
"Gold is held to do three things: hedge against currency debasement and unexpected inflation, provide a low-correlation ballast when stocks fall, and act as crisis insurance when geopolitical or financial stress sends investors toward hard assets. The macro backdrop has been supportive on all three fronts."
"IAU has delivered on its mandate. Over five years it returned 157%, and over ten years 249%. Compared with SPDR Gold Shares (GLD), IAU's larger competitor, the gap is small but real: GLD returned 155% over five years and 244% over ten."
IAU, a grantor trust holding allocated gold bullion, has returned 42% over the past year, benefiting from inflation and Federal Reserve rate cuts. Each share represents a fractional claim on physical gold, tracking the spot market minus a 0.25% expense ratio. Gold serves to hedge against currency debasement, provide low correlation during stock declines, and act as crisis insurance. IAU has outperformed its competitor GLD slightly due to its lower expense ratio, returning 157% over five years compared to GLD's 155%. The macroeconomic environment has supported gold's role in portfolios.
Read at 24/7 Wall St.
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