Unlike BlackRock iShare’s original IAU, the new gold ETF gains exposure to gold investments by investing through a wholly-owned subsidiary organized in the Cayman Islands, which can make up 25% of the total portfolio. The U.S.-domiciled portion is made up of fixed-income securities, cash and cash equivalents for collateral purposes, with the goal of generating interest income and capital appreciation.
Due to the investment structure, IAUF investors will only need to fill out a 1099 form come tax season or avoid the grantor trusts and commodity pools, along with the accompanying tax issues.
IAUF provides “exposure to the price performance of gold” and is “designed to simplify tax filings as the fund does not require K-1 tax reporting,” according to BlackRock.
Current holdings include 24.0% IAU and 76% collateral for gold futures.
For more information on new fund products, visit our new ETFs category.
CORRECTION: Updated IAUF holdings.