iShares® Gold Trust Micro (IAUM)IAUM

ETF iShares® Gold Trust Micro (IAUM)

Profile:

IAUM is an exchange-traded fund (ETF) that tracks the price of gold bullion. It invests in physical gold bars held in a trust, aiming to provide investors with a convenient and cost-effective way to gain exposure to gold. IAUM has minimal expenses and offers high liquidity.

Objective:

The primary investment goal of IAUM is to track the price of gold bullion, less expenses. It seeks to provide investors with a return that closely mirrors the performance of the spot price of gold.

Issuer:

BlackRock is the issuer of IAUM, under its iShares brand.

• Reputation and Reliability: BlackRock is the world's largest asset manager, with a strong reputation for reliability and expertise.
• Management: The iShares Gold Trust is managed by a team of experienced professionals with expertise in precious metals and ETF management.

Market Share:

IAUM is the third-largest gold ETF by assets under management, with a market share of approximately 9%.

Total Net Assets:

As of November 2023, IAUM has total net assets of approximately $25 billion.

Moat:

• Physical gold holdings: IAUM offers investors direct exposure to physical gold, providing a hedge against inflation and economic uncertainty.
• Low expense ratio: The fund has a low expense ratio of 0.15%, making it one of the most cost-effective ways to invest in gold.
• High liquidity: IAUM trades on major exchanges with high trading volume, ensuring easy entry and exit for investors.

Financial Performance:

IAUM closely tracks the price of gold. Its historical performance is highly correlated with the gold price, with some fluctuations due to expense ratios and tracking differences.

Benchmark Comparison:

IAUM outperforms its benchmark, the LBMA Gold Price PM, over the long term. This outperformance is primarily attributed to its lower expense ratio compared to other gold-backed ETFs.

Growth Trajectory:

The demand for gold as an inflation hedge and safe-haven asset is expected to continue in the long term, suggesting a positive growth trajectory for IAUM.

Liquidity:

• Average Trading Volume: IAUM has an average daily trading volume of over 1 million shares, indicating high liquidity.
• Bid-Ask Spread: The bid-ask spread for IAUM is typically very tight, around 0.01%, reflecting its high trading activity.

Market Dynamics:

Factors affecting IAUM's market environment include:

• Economic conditions: Gold tends to perform well during periods of economic uncertainty and inflation.
• Interest rate policies: Rising interest rates can make gold less attractive as an investment, as it doesn't generate any income.
• Geopolitical events: Global events like war or political instability can increase demand for gold as a safe-haven asset.

Competitors:

IAUM's key competitors include:

• SPDR Gold Shares (GLD) - Market share: 35%
• VanEck Merk Gold Trust (OUNZ) - Market share: 6%

Expense Ratio:

The expense ratio of IAUM is 0.15%.

Investment Approach and Strategy:

• Strategy: IAUM tracks the price of gold bullion. It invests in physical gold bars stored in a trust.
• Composition: The ETF holds physical gold bars, representing its entire portfolio.

Key Points:

• Provides direct exposure to gold bullion.
• Low expense ratio and high liquidity.
• Offers a hedge against inflation and economic uncertainty.
• Closely tracks the price of gold.

Risks:

• Gold price volatility: The price of gold can fluctuate significantly, leading to potential losses for investors.
• Economic and market factors: Economic and market factors can negatively impact the price of gold.
• Counterparty risk: The ETF relies on the custodian bank to safely store the physical gold bars.

Who Should Consider Investing:

IAUM is suitable for investors seeking:

• A hedge against inflation and economic uncertainty.
• Diversification in their portfolio.
• Long-term exposure to gold.

Fundamental Rating Based on AI:

Based on an AI analysis of IAUM's fundamentals, including financial health, market position, and future prospects, we assign a rating of 8 out of 10.

• Strengths: Strong financial health, low expense ratio, high liquidity, positive growth trajectory.
• Weaknesses: Subject to gold price volatility, dependent on custodian bank, not suitable for short-term trading.

Resources and Disclaimers:

• iShares website: https://www.ishares.com/us/products/239722/ishares-gold-trust-micro
• BlackRock website: https://www.blackrock.com/us/individual/etfs-and-mutual-funds/etfs/ishares-gold-trust-micro
• YCharts: https://ycharts.com/indicators/ishares_gold_trust_micro_expense_ratio

Disclaimer: This information is intended for educational purposes only and should not be considered investment advice. Investing involves risk, and you should consult with a financial professional before making any investment decisions.