Skip to Content
Fund Times

iShares Gold Trust Suspends New Creations

A flood of safe-haven buyers causes a precarious situation in this gold exchange-traded product.

Mentioned: , ,

On March 4,  BlackRock (BLK) announced that it would be temporarily suspending the creation of new shares of iShares Gold Trust (IAU). In light of this development, investors who have been bit by the gold bug should steer clear of this gold-backed exchange-traded product (ETP) until iShares gets the go ahead to issue new shares.

IAU is not an exchange-traded fund. Rather, it is an exchange-traded commodity. It is not eligible to be registered as an investment company under the Investment Company Act of 1940. IAU is registered as a grantor trust under the Securities Act of 1933. When IAU first registered under the '33 Act, it was allotted a finite number of shares. By way of comparison, investment companies registered under the ’40 Act are allowed to continuously offer new shares.

Ben Johnson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.