BlackRock’s iShares rolled out another gold ETF that comes with a more favorable tax treatment.
BlackRock recently rolled out the actively managed iShares Gold Strategy ETF (Cboe: IAUF), which has a 0.25% expense ratio.
IAUF will be managed by Greg Savage, Managing Director, Alan Mason, a Managing Director of BlackRock Advisors, and Richard Mejzak, co-head of Portfolio Management of the Americas for the Cash Management Group.
The iShares Gold Strategy ETF will try to provide exposure to the price performance of gold.
“IAUF is a transparent active ETF, but it’s not actively managed in the traditional sense, meaning IAUF will not be managed based on fundamental or technical market views,” Mark Alberici, head of iShares product innovation at BlackRock, told ETF.com.
Bloomberg Composite Gold Index
The new gold ETF is closely correlated with the Bloomberg Composite Gold Index, which is designed to track the price performance of gold. IAUF’s underlying portfolio may include exposure to iShares Gold Trust (NYSEArca: IAU), exchange traded products linked to gold, gold futures and over-the-counter derivatives.
Related: What’s Ailing Gold ETFs
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.