How GLD and IAU Custody Actually Works

Gold ETFs are among the largest gold owners on Earth. Together, the SPDR Gold Trust and iShares Gold Trust reported roughly $120 billion in combined net assets at the end of their most recent fiscal years, backed by real bars in real vaults. Yet most retail owners have no idea who actually holds that metal, who is legally responsible if a bar goes missing, or what the prospectuses say about the (narrow) list of things that would force the fund to pay you back in dollars instead of in gold you cannot touch. This guide walks the custody chain of both trusts from the exact language of their 2025 Form 10-K filings on the SEC EDGAR database, so you can see the structure without a marketing filter.

Why the custody chain matters when you own a gold ETF

A share of GLD or IAU is not a receipt for a specific gold bar with your name on it. It is a fractional undivided beneficial interest in a grantor trust that owns bars collectively. The trust is a passive legal vehicle, so every operational function is delegated to a separate company: one entity sponsors the trust, another acts as trustee, and one or more custodians physically hold the bars. If any link in that chain fails, your share price still reflects the gold, but your ability to convert the share into anything other than cash depends on contracts you never signed.

The SEC filings are precise about who does what. Both trusts publish an annual Form 10-K that names each service provider by legal entity, describes the custody agreements, and quotes the risk conditions under which the custodian is off the hook. Reading these pages once is worth years of internet arguments about whether ETFs are backed by real gold. They are. The interesting question is what “backed by” actually means in a courtroom, and that turns on the custody chain.

SPDR Gold Trust (GLD): a five-role structure with two custodians

The SPDR Gold Trust filed its most recent annual report on 25 November 2025 covering the fiscal year that ended 30 September 2025. The 10-K opens with a plain statement of the five roles that keep the fund running.

The sponsor is World Gold Trust Services, LLC, a Delaware limited liability company formed on 17 July 2002. World Gold Trust Services is a subsidiary of the World Gold Council and oversees the trust as a whole. The trustee is The Bank of New York Mellon, which processes creation and redemption orders from Authorized Participants, calculates the net asset value each business day, and holds legal title to the trust assets on behalf of shareholders. State Street Global Advisors Funds Distributors, LLC serves as marketing agent under the SPDR brand. The trust is listed on NYSE Arca under the ticker GLD.

What matters for custody: the FY25 10-K states that the trust has two custodians: HSBC Bank plc and JPMorgan Chase Bank, N.A. Both entities are named as “Custodians” (a change from the trust’s historical single-custodian arrangement with HSBC). The 10-K discloses that the current custody framework was amended in May 2024, and the underlying agreement is titled the “Fifth Amended and Restated Allocated Bullion Account Agreement dated May 28, 2024 between HSBC Bank plc and The Bank of New York Mellon”, with a parallel unallocated account agreement. Diversifying across two large bullion banks reduces single-point-of-failure risk if either one has an operational issue.

The 10-K is also explicit about where the metal sits. It states that “the Trust’s gold holdings are identified on each of the Custodian’s books as the property of the Trust and held in London, New York or Zurich.” Bars are held on an allocated basis at end of business day, meaning each bar is identified by refiner, serial number, and weight on the custodian’s records, not pooled as an anonymous claim on the bank. Only trace amounts of unallocated gold appear during intraday creation or redemption activity.

Creation and redemption: baskets of 100,000 shares

Shares are created and redeemed in blocks called “Baskets”, each equal to 100,000 shares. Only Authorized Participants may transact with the trust directly. To become one, an entity must be a registered broker-dealer (or a bank exempt from registration), a DTC participant, and it must have an unallocated gold account meeting the requirements of each custodian. Every creation or redemption order carries a $2,000 transaction fee paid to the trustee.

This is the mechanic that keeps GLD’s share price close to the value of the underlying metal. When shares trade at a premium to NAV, an Authorized Participant delivers bullion, receives baskets, and sells the shares on the open market. When they trade at a discount, the reverse trade happens. Ordinary retail investors never participate in this loop. Your broker cannot deliver metal to the trust on your behalf, and the trust cannot deliver metal to your broker on your behalf either.

The recurring fee that eats into your position

GLD’s only recurring fixed expense is the sponsor’s fee, which accrues daily at an annual rate of 0.40% of the daily NAV. In exchange, the sponsor pays the trustee, the custodians, the marketing agent, and other ordinary operating costs. For FY25, this fee produced sponsor fees of $363,083,000 (reported in thousands), roughly a 50% jump over the prior fiscal year on higher gold prices and larger trust assets. Because the trust holds no interest-bearing assets, the fee is funded by selling gold each period, which slowly reduces the ounces backing each share over time.

iShares Gold Trust (IAU): a single London-based custodian

The iShares Gold Trust filed its most recent annual report on 27 February 2026 covering the fiscal year ended 31 December 2025. Its structure is a step simpler than GLD’s.

The sponsor is iShares Delaware Trust Sponsor LLC, a Delaware limited liability company and a consolidated subsidiary of BlackRock, Inc. The trustee is The Bank of New York Mellon, the same entity that serves GLD. The custodian is JPMorgan Chase Bank N.A., London Branch, and the 10-K states clearly that “The agreement between the Trustee and the Custodian is governed by English law.” The trust is listed on NYSE Arca under the ticker IAU. The 10-K notes the trust was formerly known as the “iShares COMEX Gold Trust” from its 2005 inception through 2010.

IAU is one of the fastest-growing gold ETFs by asset base. The 10-K reports net asset value grew from $32.9 billion at the end of 2024 to $68.4 billion at the end of 2025, with shares outstanding rising from 668,650,000 to 842,850,000 over the same period. Sponsor fees for FY25 totalled $124,023,218, which the filing explicitly notes represented 0.25% of the trust’s average weighted assets of $49.6 billion for the year.

Sub-custodians: a permitted but bounded risk

The IAU 10-K is unusually candid about what happens if the custodian delegates. Direct quote: “The Custodian may, at its own expense and risk, use sub-custodians to discharge its obligations to the Trust. The Custodian will remain responsible to the Trust for any gold held by any sub-custodian appointed by the Custodian to the same extent as if such gold were held by the Custodian itself.”

Two things are important here. First, sub-custodians are permitted, so gold ostensibly held by JPMorgan in London may be physically stored elsewhere on JPMorgan’s behalf. Second, JPMorgan remains contractually on the hook to the trust for that gold, and any economic cost of using a sub-custodian falls on JPMorgan rather than shareholders. Where the metal is actually stored is disclosed at a category level: the 10-K states holdings “are held by the Custodian in New York, London and other locations that may be authorized in the future.”

Creation and redemption: baskets of 50,000 shares

An IAU Basket is a block of 50,000 shares. As of the FY25 report, the list of Authorized Participants includes ABN AMRO Clearing USA LLC, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs, HSBC Securities (USA), J.P. Morgan Securities, Merrill Lynch Professional Clearing, Morgan Stanley, Scotia Capital, SG Americas, UBS Securities, and Virtu Americas. Again, retail investors have no direct line to the creation and redemption process.

Side-by-side: what changes between GLD and IAU

The two trusts serve nearly identical investment objectives, but the operational plumbing differs in ways worth reading before you decide which one to hold.

The 15 basis-point sponsor fee gap between IAU (0.25%) and GLD (0.40%) is the reason IAU has quietly overtaken GLD as the cost-conscious retail default in some brokerage platforms. On a $100,000 position held for 10 years, that gap compounds to roughly $1,500 in avoided fees before considering share-price differences. For institutions, GLD’s higher liquidity and options depth often still win the trade.

What the prospectuses actually say about risk

Both 10-Ks contain a risk factors section that most retail buyers never read. A few passages deserve to be highlighted verbatim.

The IAU 10-K addresses the outer edge of custodian liability with this clause: “None of the Custodian, or its directors, employees, agents or affiliates will incur any liability to the Trust if, by reason of any law or regulation, or of an act of God, terrorism or other circumstance beyond the Custodian’s control, the Custodian is prevented or forbidden from, or delayed in, performing its obligations to the Trust.” A separate clause enumerates additional force majeure triggers including nationalization, war, invasion, insurrection, civil commotion, riot, strike, and government action.

Insurance is treated as a contractual promise, not a legal guarantee. The IAU 10-K notes that “The Custodian has agreed to maintain insurance in support of its custodial obligations under the Custodian Agreement, including covering any loss of gold.” It then adds a sentence that is often skipped: “The Custodian has the right to reduce, cancel or allow to expire without replacement such insurance coverage, provided that it gives prior written notice to the Trustee.” Translation: the amount and existence of insurance can change over time, and shareholders learn about it after the fact through subsequent disclosures.

The GLD 10-K contains a parallel structure for its two custodians, plus a specific obligation borrowed from London bullion market custom: each custodian must provide a bar list identifying custodians and sub-custodians on request. In practice this bar list is published (SPDR discloses the GLD bar list on its public site and updates it daily), which is why gold-market analysts can cross-check the trust’s stated ounces against physically identified bars. IAU’s public site publishes an equivalent inspectors’ report and periodic bar list.

Both trusts also carry a class of risk that is not custody-specific: they are not registered investment companies under the Investment Company Act of 1940, and shares are not covered by SIPC or FDIC protection. This is normal for commodity-backed grantor trusts, but the absence of these familiar backstops is worth naming.

What retail holders cannot do: no in-kind redemption

The most persistent misunderstanding about gold ETFs is the belief that a large enough position lets you eventually take physical delivery. It does not. Both trusts explicitly restrict creation and redemption to Authorized Participants who transact in Basket-sized blocks.

Even if you buy 50,000 shares of IAU (one full Basket), you cannot walk them into a JPMorgan vault and ask for the corresponding ounces of gold. You are not a party to the Authorized Participant Agreement. The only way to convert your position into cash is to sell it on NYSE Arca like any other listed security, and the only way to convert it into physical metal is to sell it and then buy bars separately from a coin or bullion dealer. This is not an oversight in the structure. It is a deliberate design feature that keeps the trusts compliant with a specific set of tax and securities carve-outs.

The one class of investor who does effectively convert shares into bars is the Authorized Participant redeeming a Basket. That process consumes bullion from the trust’s allocated account and delivers it to the AP’s own unallocated account at the custodian. The transaction is invisible to retail. If you want the same economic effect, you have to route through a physical bullion dealer or, for retirement accounts, through a self-directed IRA structure that can title metal to your account directly.

How ETF custody compares with holding physical bars in a self-directed IRA

For readers researching both structures, the practical differences are cleaner than the marketing usually suggests. The custody arithmetic below assumes fair comparison at a $100,000 position size.

Neither structure is objectively better. The ETF is optimal for liquidity, low transaction costs, and daily trading flexibility. The physical-bar-in-IRA structure is optimal for readers who specifically want title to identifiable metal, in-kind distribution optionality at retirement, and a shorter counterparty chain. For a broader breakdown, see Gold IRA vs. Gold ETF and Paper gold vs. physical gold, explained. If you are unfamiliar with the allocated-versus-unallocated distinction that underlies both custody frameworks, our reference on allocated vs. unallocated gold covers it in a page.

How the two trusts fit into a broader gold market

The bars sitting behind GLD and IAU are almost all LBMA Good Delivery bars, refined and cast to a standard that London bullion market participants accept without further assay. These are the same bars that flow between central banks, market makers, and refiners in London, New York, and Zurich, which is why the geographic footprint of the custodians tracks the global bullion market’s three main clearing centres. The daily reference price used to strike both trusts’ NAV is the LBMA Gold Price PM, calculated by ICE Benchmark Administration each afternoon in London.

What this means for someone buying shares: the ETF is a very efficient way to gain exposure to the wholesale bullion market at wholesale-adjacent pricing, minus the sponsor fee. But that exposure is legally a share, not a bar. If the distinction matters for your objectives, the custody chain above is the reason.