GLD proposals re expenses

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1061
Joined: Tue Dec 18, 2012 6:35 pm

GLD proposals re expenses

Post by I Shrugged » Fri Jul 04, 2014 7:42 pm

Has anyone read the GLD shareholder-vote proposals pending now?  Thoughts?
Stay free, my friends.
User avatar
bronsuchecki
Full Member
Full Member
Posts: 78
Joined: Wed Nov 09, 2011 9:47 pm
Location: Perth, Western Australia
Contact:

Re: GLD proposals re expenses

Post by bronsuchecki » Sun Jul 06, 2014 8:15 pm

Interesting, seems WGC currently only gets 0.15% of the 0.40% management fee, but now wants the entire 0.40% along with which it will take all the costs. As it notes "the net amount earned by the Sponsor could be greater or smaller than the fee of 0.15% of the daily ANAV of the Trust it currently earns, depending on the actual expenses of the Trust."

The only reason anyone would take that deal is because they will generally earn more over time by getting 0.40% less all costs vs 0.15% and no costs. The latter made sense when the fund was launched because it was not certain if 0.40% would cover all costs, but now that GLD has been operating for many years and has a large AUM, the 0.40% revenue less costs is more stable and certain so WGC wants all the profit from a fund that it did pay to set up. Coincidental this happens when two large SA miners dropped out of the WGC and thus the WGC lost a big revenue source?

I also note with interest the additional amendments, which include

"amendment provides that the creation of baskets of Shares may only be made after the requisite gold is deposited in the allocated account of the Trust that has been established with the Custodian, or the Trust Allocated Account" ... This amendment provides additional security for Shareholders by eliminating potential risks related to issuing baskets of Shares against unallocated gold if the Custodian was to become insolvent or if the unallocated gold was otherwise not allocated for some other unforeseen reason.

My emphasis on the bold bid. Why the need to clarify this now, is there something the WGC knows about the state of the market that didn't exists before?  :)
Disclosure: I work for the Perth Mint. What I say is done in a personal capacity and is not endorsed by the Mint.
User avatar
bronsuchecki
Full Member
Full Member
Posts: 78
Joined: Wed Nov 09, 2011 9:47 pm
Location: Perth, Western Australia
Contact:

Re: GLD proposals re expenses

Post by bronsuchecki » Wed Jul 16, 2014 8:04 pm

Posted on this here http://goldchat.blogspot.com.au/2014/07 ... eseen.html and gave you a hat tip I Shrugged
Disclosure: I work for the Perth Mint. What I say is done in a personal capacity and is not endorsed by the Mint.
Post Reply