By PRODUCT KEY FACTS
SPDR® Gold Trust January 2014 This is an exchange traded fund ("ETF"). This statement provides you with key information about this product. This statement is a part of the Prospectus1. You should not invest in this product based on this statement alone.Quick facts
Stock Code: 2840 Trading lot size: 10 Shares Sponsor: World Gold Trust Services, LLC, a wholly-owned subsidiary of the World GoldCouncil, registered under Swiss law
Trustee: BNY Mellon Asset Servicing, a division of Bank of New York Mellon Custodian: HSBC Bank USA, N.A. Marketing Agent: State Street Global Markets, LLC Estimated Expenses: 0.40% per annum of the daily adjusted net asset value ("ANAV")* Underlying Benchmark: The afternoon fixing price of an ounce of gold by the London Gold Market FixingLimited (London PM Fix)
Base currency: US Dollars (USD) Trading currency: Hong Kong Dollars (HKD) Dividend Policy: No dividends will be paid Financial year end of this fund: 30 September ETF Website: http://www.spdrgoldshares.com 2What is this product?
SPDR® Gold Trust (the "Trust") is a standalone investment trust formed under New York law. The Trust is an ETF which holds gold bullion. Shares of the Trust (the "Shares") are primarily traded on NYSE Arca, Inc. ("NYSE Arca") and are also traded on the Stock Exchange of Hong Kong Limited ("SEHK"). As to the other exchanges which the Trust is listed, please refer to the Prospectus for details.
The Trust is sponsored by World Gold Trust Services, LLC, a wholly owned subsidiary of the World Gold Council, and marketed by State Street Global Markets, LLC, an affiliate of State Street Global Advisors. State Street Global Advisors Asia Limited, the Hong Kong Representative of the Trust, is the primary contact point for investors in Hong Kong.
Objective and Investment Strategy
ObjectiveThe investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the Trust's expenses.
Strategy
The Trust holds gold bullion and from time to time issues the Shares in blocks of 100,000 Shares ("Baskets") in exchange for deposits of gold and distributes gold in connection with the redemption of Baskets.
The Shares are intended to offer investors an opportunity to participate in the gold market through an investment in securities whilst the logistics of storing and insuring gold are dealt with by the Custodian and the related expenses are built into the price of the Shares.
1 The Hong Kong Prospectus incorporates and should be read in conjunction with the attached U.S. Prospectus for the Trust and the U.S. annual report of the Trust filed with the Securities and Exchange Commission (collectively, the "Prospectus").
* There are situations where the estimated expenses may be accrued at a rate greater than 0.40% per annum of the daily ANAV of the trust.
Please refer to footnote 3 below or paragraph 6.2 of the Hong Kong Prospectus for further information.
2 The ETF website has not been reviewed by the Securities and Futures Commission ("SFC") and may contain information of funds not authorized by the SFC.
THIS DOCUMENT IS SOLELY FOR HONG KONG INVESTORS
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The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust. The Trust is not managed like a corporation or an active investment vehicle. The gold held by the Trust will only be sold; (1) on an as-needed basis to pay Trust expenses, (2) in the event the Trust terminates and liquidates its assets, or (3) as otherwise required by law or regulation.
The Trust does not and will not invest in derivative financial instruments and has no foreign operations or long-term debt instruments. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk.
The Trustee is not permitted to borrow for payment of the Trust's ordinary expenses. In order to pay ongoing expenses of the Trust, the Trustee may be directed to sell gold bullion.
The London PM Fix is a price quoted in USD by The London Gold Market Fixing Limited in London and published by the London Bullion Market Association ("LBMA") usually by 15:00 (London time). The London PM Fix is a widely used international benchmark for daily gold prices. The net asset value (the "NAV") of the Trust will be valued by reference to the London PM Fix. You may view the London PM Fix published by the LBMA at any time on the LBMA's website www.lbma.org.uk under "London Gold Fixing".
You may also view the indicativ e intra-day NAV and latest NAV per Share at the following website:
www.spdrgoldshares.com
What are the key risks?
Investment involves risks. Please refer to the Prospectus for details including the risk factors.
1. Gold market risk/Investment risk
• The value of the Shares relates directly to the value of the gold held by the Trust (less the Trust's expenses) and fluctuation in the price of gold may materially adversely affect the value of the Shares. The Shares have experienced significant price fluctuations.
• The price of gold may be affected by the sale of gold by ETFs or other exchange traded vehicles tracking gold markets.
• There is no assurance that gold will maintain its long-term value in terms of its long-term purchasing power in the future. In the event that the price of gold declines, it is expected the value of the Shares will decline proportionately.
• Investment involves risk, in particular the Trust invests in one single commodity asset class which may result in higher price volatility compared to more diversified mutual funds or unit trusts investing in portfolios of securities. There is no guarantee that you will get back your original investment.
• The Trust's gold may be subject to loss, damage, theft or restriction on access. The Trust does not insure its gold. The Custodian maintains insurance which it considers appropriate for its custody and/or bullion business. Consequently, the Trust may suffer a loss with respect to the Trust's gold which is not covered by insurance and for which no person is liable in damages.
• Because neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may temporarily hold the Trust's gold bars until transported to the Custodian's London vault, failure by the subcustodians to exercise due care in the safekeeping of the Trust's gold bars could result in a loss to the Trust.
• The ability of the Trustee and the custodian to take legal action against subcustodians may be limited, which increases the possibility that the Trust may suffer a loss if a subcustodian does not use due care in the safekeeping of the Trust's gold bars.
• The custody operations of the custodian are not subject to specific governmental regulatory supervision.
• The Trust is not managed like a corporation or an active investment vehicle and no manager has been appointed.
Therefore, no attempt will be made to buy or sell gold to protect against or to take advantage of fluctuations in the price of gold. This means that the value of Shares may be adversely affected by Trust losses that, if the Trust had been actively managed, it might have been possible to avoid.
THIS DOCUMENT IS SOLELY FOR HONG KONG INVESTORS
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4. Trading risk
• Currently, only "Authorized Participants" (i.e. financial institutions which have entered into arrangements with the Sponsor, the Trustee and the Custodian) may place orders to create or redeem Baskets of Shares in the U.S. and redemption orders may be postponed, suspended or rejected by the Trustee in certain circumstances. Prospective investors in Hong Kong may enquire with State Street Global Advisors Asia Limited, the Hong Kong Representative of the Trust for details of the creation and redemption procedures. However, as the Shares are listed on the SEHK, prospective investors may buy or sell the Shares at any time during a trading day. Please refer to the list of Authorized Participants in section 1 headed "Summary" in the Prospectus.
• The liquidity of the Shares may be affected by the withdrawal of Authorized Participants.
• Subject to applicable regulatory requirements, the Sponsor intends to ensure that there is at least one market maker for the Trust in Hong Kong to facilitate efficient trading but there is no guarantee that the Sponsor will be able to do so on appropriate condition and commercial terms. Please refer to SEHK's website for the latest list of market makers.
• The Shares may trade at a price which is at, above or below the NAV per Share.
• Listing of the Shares on the SEHK does not guarantee a liquid market for the Shares, and the Shares may be suspended or delisted from the SEHK. The lack of an active trading market or a halt in trading of the Shares may result in losses on investment at the time of disposition of the Shares.
• Investors are subject to currency risk as the Shares traded on the SEHK are denominated in H.K. dollars but the Shares may only be created or redeemed in USD. Similarly, any distributions relating to the Shares which may be made by the Trust are in USD.
6. Selling gold to meet ongoing expenses• The Trust does not generate income and as the Trust regularly sells gold to pay for its ongoing expenses, the amount of gold represented by each Share will reduce on an ongoing basis, irrespective of whether the trading price of the Shares rises or falls in response to changes in the price of gold. Moreover, as the Trustee sells gold to pay expenses on an as-need basis, it may be required to sell gold at a time when the gold price is low.
Is there any guarantee?
The Trust does not have any guarantees. You may not get back the amount of money you invest.
What are the fees and charges?
Charges incurred when trading the Shares on SEHKFee | What you pay |
Brokerage fees: Transaction Levy: SEHK Trading Tariff: SEHK Trading Fee: Stamp Duty: | At each broker's discretion 0.003% of the total consideration for the Shares of the Trust HK$0.5 payable on each and every purchase or sale transaction 0.005% of the total consideration for the Shares of the Trust Nil |
Please refer to section 6 (Fees) of the Hong Kong Prospectus for details of fees and charges applicable.
THIS DOCUMENT IS SOLELY FOR HONG KONG INVESTORS
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Ongoing fees payable by the TrustThe following expenses will be paid out of the Trust. They affect you because they reduce the NAV of the Trust which may affect the trading price.
Annual Rate (as a % of ANAV) | |
Sponsor's fee: | 0.15% of the ANAV of the Trust per annum, this is subject to a reduction3 described in the Prospectus. |
Trustee's fee: | 0.02% of the daily ANAV of the Trust per annum, subject to a minimum fee of US$500,000 and maximum fee of US$2 million per year. |
Custodian's fee: | 0.10% of the average daily aggregate value of the first 4.5 million ounces of Gold held in the allocated account and the unallocated account, and 0.06% of the average daily aggregate value of the Gold held in the allocated account and the unallocated account in excess of 4.5 million ounces. |
Marketing Agent's fee: | 0.15% of the daily ANAV of the Trust per annum, this is subject to a reduction3 described in the Prospectus. |
Hong Kong Representative's Fee: | US$250,000 per annum, payable in quarterly instalments, commencing on first day on which the Shares of the Trust are traded on the SEHK. |
You may have to pay other fees to brokers when dealing in the Shares of the Trust.
Additional InformationYou can find the following information of the Trust at the following website at: http://www.spdrgoldshares.com/#hk
• The Trust's Prospectus (including this Product Key Facts Statement);
• Indicative intra-day NAV and last closing NAV of the Trust;
• Near real-time estimated Net Asset Value per Share (i.e. Reference Underlying Portfolio Value per Share)
throughout each trading day;
• Any public announcements or notices made by the Trust, including notices of suspension and resumption of trading
• Latest available annual report of the Trust on Form 10-K;
• Latest available quarterly report of the Trust on Form 10-Q;
• The latest U.S. Prospectus on Form S-3; and
• List of Authorized Participants which is disclosed in the Prospectus.
Important
If you are in doubt, you should seek professional advice.
The Securities and Futures Commission takes no responsibility for the contents of this statement and makes no representation as to its accuracy or completeness.
3 The fees of the Sponsor and Marketing Agent are payable monthly, in arrears, and is each accrued daily at an annual rate equal to
0.15% of the ANAV of the Trust, each subject to reduction as described below.
Investors should note that under the Marketing Agent Agreement, as amended, if at the end of any month, the estimated ordinary expenses of the Trust exceed for such month an amount equal to 0.40% per year of the daily ANAV of the Trust for such month (the "0.40% limit"), the Sponsor and the Marketing Agent will waive the amount of such excess from the fees payable to them from the assets of the Trust for such month in equal shares up to the amount of their fees subject to the conditions stated in the Hong Kong Prospectus. For example, if at the end of any month, the estimated ordinary expenses of the Trust exceed the 0.40% limit, each of the Sponsor and the Marketing Agent will reduce such amount of fees payable to them from the assets of the Trust to bring the ordinary expenses of the Trust to an amount equal to the 0.40% limit.
Investors should be aware that, based on current expenses, if the gross value of the Trust assets is less than approximately US$1.2 billion, the ordinary expenses of the Trust will be accrued at a rate greater than 0.40% per year of the daily ANAV of the Trust, even after the Sponsor and the Marketing Agent have completely waived their combined fees of 0.30% per year of the daily ANAV of the Trust. This amount is based on the estimated ordinary expenses of the Trust and may be higher if the Trust's actual ordinary expenses exceed those estimates. Additionally, if the Trust incurs unforeseen expenses that cause the total ordinary expenses of the Trust to exceed 0.70% per year of the daily ANAV of the Trust, the ordinary expenses will accrue at a rate greater than 0.40% per year of the daily ANAV of the Trust, even after the Sponsor and the Marketing Agent have completely waived their combined fees of 0.30% per year of the daily ANAV of the Trust.
Investors should refer to paragraph 6.2 of the Hong Kong Prospectus for further details.
THIS DOCUMENT IS SOLELY FOR HONG KONG INVESTORS
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