Filed Pursuant To Rule 433
Registration No. 333-209926
April 6, 2016
Good as Gold
Re-Appraising Strategic Allocations
to Gold
For thousands of years gold has been one of the world’s most valuable metals, used as both a form of currency and an investment. Investors have
traditionally used gold to help preserve wealth in times of market volatility or periods of high inflation and to diversify portfolios. Beginning in 2013, concerns surrounding rising interest rates and a strong US dollar put pressure on the price of
gold, and many investors reassessed gold’s value and questioned how it should be used in portfolios going forward. We believe gold should be viewed as a long-term strategic asset and that investors should carefully consider gold’s
potential price drivers today and beyond.
While the US dollar and interest rates are important factors that drive the price of gold, there are many other variables
that influence the precious metal. Today, the relationship between gold and market and economic forces is even more complex and very different from the past. Several other factors including the frequency of tail risk events, supply/demand dynamics
and central bank purchases play prominent roles. Regardless of the macroeconomic environment, the potential portfolio diversification benefits of gold remain. As an investment, the economic forces that determine the price of gold are different from
the economic forces that determine the price of many other asset classes such as equities, bonds or commodities. Therefore, gold offers investors a unique opportunity to seek to diversify portfolios because of its relatively low historical
correlation with many other asset classes (See Figure 1). So, does it still make sense to invest in gold? We believe the answer is a resounding yes. In fact, today, many investors are reappraising gold’s value and viewing the precious metal not
as a temporary and opportunistic holding, but as a unique strategic asset class with the potential to diversify and further strengthen portfolios in a variety of market conditions. Whether gold is
Figure 1: Gold as a Potential Portfolio Diversifier Correlation of Returns to Other Asset Classes Bloomberg Commodity Index BOFA Merrill Lynch US Corporate Index MSCI Emerging
Markets Index Barclays US Aggregate Index MSCI EAFE Index
BOFA Merrill Lynch US Treasury Index Dow Jones US Select Reit Index Barclays US HighYield Index Russell
2000 Index S&P 500 Index US 3M Libor (Cash) -0.07 -0.01 0.08 0.07 0.10 0.16 0.15 0.19 0.23 0.21 0.44 -0.1 0 0.1 0.2 0.3 0.4 0.5
Source: State Street Global
Advisors (SSGA), Bloomberg, as of 12/31/2015. Computed using monthly return data from Dec 1990 to Dec 2015. Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and
loss and the reinvestment of dividends and other income. Diversification does not ensure a profit or guarantee against loss. The correlation coefficient measures the strength and direction of a linear relationship between two variables. It measures
the degree to which the deviations of one variable from its mean are related to those of a different variable from its respective mean.
Good as Gold Re-Appraising Strategic Allocations to Gold
Figure 2: Gold as a Tail Risk Hedge — Performance in Market Downturns
% 20 0 -20 -40 -60
-80
Gulf War I LTCM Dot.com Meltdown 9/11 2002 Recession Great Recession Sovereign Debt Crisis I
Gold MSCI US TR Index Commodities Hedge Funds Real Estate Private Equity US Treasuries
Source:
FactSet, SSGA, from 12/31/1989 to 12/31/2013.
Notes: Persian Gulf War I: Q3 1990, LTCM: Q3 1998, Dot-com Meltdown: Q1 2001, 9/11: Q3 2001, 2002 Recession: Q2/Q3
2002, US Credit Crisis: Q4 2008/Q1 2009, European
Sovereign Debt Crisis: Q2 2010.
Past performance is not a guarantee of future results. Gold may not serve as a hedge in all market conditions.
Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and
other income.
The correlation coefficient measures the strength and direction of a linear relationship between two variables. It measures the degree to which the
deviations of one variable from its mean are related to those of a different variable from its respective mean.
Indices representing the above asset classes are as
follows: Gold = LBMA Afternoon Gold Price as tracked by ICE Benchmark Administration Ltd., Equities = MSCI US TR Index, Commodities: S&P Goldman Sachs Commodity Index, Hedge Funds = Hedge Fund Research HFRI Fund Weighted Composite Index, Real
Estate = Dow Jones US Select REITS Total Return Index, Private Equity = Cambridge Associates Index, US Treasuries = Barclays Capital US Treasury Aggregate Index.
rallying or weakening, we believe that it’s always appropriate for investors to consider a strategic role for gold in their portfolios.
Gold’s Strategic Value
Over time, holding a modest allocation to gold has offered a range
of potential portfolio benefits, including:
Low Correlation to Major Asset Classes
Reduce Volatility by Diversifying Portfolios1
Wealth Preservation (See Figure 2)
Portfolio Diversification
The principle of diversification holds that portfolios benefit from
a wide array of assets that behave differently from one another under various market conditions. The rationale is simple: Given that it is virtually impossible to know which asset classes will do best or how economic developments may impact
performance, holding a wide range of assets may improve long-term returns and may reduce portfolio risk in the long run.
Although global markets have become more
closely correlated, gold prices have not historically moved in lockstep with traditional asset classes such as equities and fixed income. This is because gold prices, again, are influenced by different factors than are prices of other assets (see
Figure 1 for recent correlations).
Therefore, adding a strategic allocation to gold — anywhere within the range of 2 percent to 10 percent of the
portfolio2— may help better insulate a portfolio against significant events that broadly affect the markets.
Moderating Volatility in Tumultuous Markets
Gold’s low correlation to other asset classes has been especially pronounced — and therefore more valuable— during market downturns.
As Figure 2
shows, in five out of the seven periods of market turmoil, an allocation to gold would have preserved wealth in a diversified portfolio by cushioning the hit taken by the portfolio. Of course, past performance does not guarantee future results.
Wealth Preservation
With heightened uncertainty in today’s complex
global market, making a consistent strategic allocation to gold affords a range of potential benefits.
For example, gold has been used as a hedge against inflation
for centuries.
State Street Global Advisors 2
Good as Gold Re-Appraising Strategic Allocations to Gold
Since 1971, gold has provided an annualized real rate of return of 4.2 percent over the US consumer price index (CPI).3 Historically, gold has seen its strongest price performance
in years of high inflation such as in 1980, providing an average real return of 19.2 percent and a median increase of 14.9 percent in years in which CPI’s increase has been greater than 5 percent.4
Over at least these past 45 years, gold has had positive real returns, giving it value as a long-term hedge against inflation.5
Gold, the US Dollar and Interest Rates
While the US dollar and interest rates are important
factors in explaining the price movement of gold, as mentioned, they are not the sole components.
Higher US interest rates may not have a dramatic negative effect
on gold due to its complex and global demand dynamics. In fact, nearly 60 percent of gold demand comes from jewelry and technology, which are positively tied to factors that may drive US interest rates higher, such as economic growth and lower
unemployment.6 And only 6 percent of global gold demand comes from the US (see Figure 4).
More central bank stimulus in the Eurozone and Japan could potentially
lend support to the price of gold should investors use it as a store of wealth if short-term interest rates remain negative in countries such as Germany, Switzerland and Japan.
Potential Gold Drivers — Today and Beyond
Key trends have emerged within some of the
primary price drivers that may bode well for gold today and in the future.
Those trends include:
Primary Supply Not Meeting Demand
Rising Asia Demand
Central Bank Buying
Under-Owned Asset
Physical Demand that Exceeds Production
Gold production over the past two decades has averaged
an annual increase of less than 1 percent. In fact, as of the fourth quarter of 2015, the total supply of gold is down 10 percent from a year earlier because of decreased mining production and a decline in the recycling of gold.7 Only a handful of
large gold deposits have been discovered over the past few decades, as mine producers face lower gold prices and higher production costs. Meanwhile, new projects and exploration have slowed. Thus, future production shows little chance of increasing
significantly.
Greater Demand from Expanding Asian Economies Jewelry represents the largest area of consumption for gold, especially in China and India, where the
rising standard of living for all sectors of the population is increasing the demand for jewelry both for cultural celebrations and as a sign of personal wealth. Physical consumer demand from this region is currently more than five times that of
Western markets.
Central Banks Becoming Net Buyers of Gold
In 2010, central
banks became net buyers of gold to reduce their dependence on the US dollar. In fact, central banks bought
Figure 4: Central Bank Net Sales and Purchases of Gold
in Tonnes
Tonnes
800
400
0
Figure 3: Over 50% Of Gold Demand Comes from Asia
-400
Asia ex China
-800
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
USA
6%
9%
Europe and India
12%
China
Source: Metals Focus, World Gold Council, as of 12/31/2015.
Middle
East 8%
India
25%
29%
588 metric tons of gold in 2015, second only to the record 625 metric
tons in 2013.8 That trend is expected to continue over the coming decades, as currency crises prompt banks to further diversify.
Other
11%
Source: Thomson Reuters GFMS, World Gold Council, 2015 annual demand, as of 12/31/2015.
Gold is Under — Owned
In spite of gold’s potential portfolio
benefits, gold is still under-owned. As a percentage of total global assets, gold amounted to just 1 percent as of June 2015, with 70 percent of all investors owning no gold whatsoever.9 However, as investors State Street Global Advisors 3
Good as Gold Re-Appraising Strategic Allocations to Gold Figure 5: Size of Financial Markets US $160 Trillion; June 30, 2015*
Gold 1% Alternative Investments 5% Debt & Money Market 51% Equities 43% around the globe come to appreciate gold’s strategic value, pension funds,
sovereign wealth funds, insurance funds, mutual funds, hedge funds, private equity funds and private wealth funds, as well as individual investors, are likely to continue to expand their use of gold as a risk management and capital preservation
tool. A Look Ahead While history underscores the many benefits of gold as a potentially “defensive asset” in challenging times, diversification and risk management, along with capital preservation, are attractive attributes in any economic
Source: BIS, Thomson Reuters GFMS, Hedge Fund Research, Preqin, World Federation of Exchange, World Gold Council. As of June 30, 2015.
* Estimates include the
global market capitalization of all publicity traded stocks and REITs; the total value of outstanding bonds and money market instruments; total open interest on major commodity futures plus above ground stocks of precious metals; the assests under
management of private equity and hedge funds; and private holdings of gold bullion. Central bank holdings of gold and bonds were excluded.
What Has Happened to the
Price of Gold?
After reaching a cycle high in 2011, gold prices retreated by about 45 percent. However, prices have largely been trading in a consistent range for
the past two years. The 27 percent decline in 2013, while sharp, was not unprecedented. Gold has seen seven pullbacks of more than 10 percent since 2001, and 12 pullbacks of 20 percent or more since 1970. After each decline, gold went on to not only
rebound but to post new all-time highs. The past several years have been marked by a confluence of factors that helped drive gold’s price lower, including fears of 10 environment. As Ralph Waldo Emerson once observed, “The desire of gold
is not for gold. It is for the means of freedom and benefit.” Although a long period of record-setting prices illustrated gold’s timeless value in times of economic uncertainty, the true “freedom and benefit” gold provides is in
its role as a strategic long-term asset. Fed tapering, low inflation expectations and US dollar strengthening. While many of these factors remain, with gold falling in the past four years, the trend, as noted, may be turning as the economic cycle
matures and new drivers of gold emerge. Those include:
1 A byproduct of gold’s low correlation to most key asset classes, such as stocks, bonds and
commodities. Over the past 25 years, the correlation of gold to stocks, bonds and other commodities was -0.01, 0.19, and 0.44, respectively. Source:
SSGA,
Bloomberg, as of 12/31/2015. Computed using monthly return data from Dec 1990 to Dec 2015. It measures the degree to which the deviations of one variable from its mean are related to those of a different variable from its respective mean. Index
returns are unmanaged and do not reflect the deduction of any fees or expenses. Stocks represented by S&P 500 Index; Bonds represented by Barclays US Aggregate Index; Commodities represented by Bloomberg Commodity Index. Index returns reflect
all items of income, gain and loss and the reinvestment of dividends and other income.
2 J.P.Morgan, Gold in asset allocation, July 2012; Mercer, Gold as an asset
class for institutional investors, February 2011; New Frontier Advisors and World Gold Council, Gold as a strategic asset, September 2006; New Frontier Advisors, Gold as a strategic asset for European investors, December 2011; Oxford Economics, The
impact of inflation and deflation in the case for gold, July 2011; Matos, P. and R. Evans, Gold as a portfolio diversifier: the World Gold Council and investing in gold; Darden Business Publishing, University of Virginia, September 2012.
Gold playing an effective role as a potential hedge as stock valuations in the US and elsewhere remain elevated and as investors have increased risk exposures in search of returns
in a very low yield environment.
Despite some concerns about gross domestic product (GDP) growth across emerging markets, economic output continues to increase and
so do incomes. This, in turn, strengthens the case for gold as a long-term strategic asset and potential wealth preservation tool.
3 World Gold Council, An
Investors Guide to the Gold Market US Edition, December 2010. As quoted in SSGA. The Case for Gold: A Strategic Asset. 4 Ibid. 5 Ibid.
6 Thomson Reuters GFMS,
World Gold Council, based on 2014 annual demand, as of 12/31/2014. 7 “Gold Demand Trends, Full Year 2015,” World Gold Council. 8 “Gold Demand Trends, Full Year 2015,” World Gold Council. 9 BIS, Thomson Reuters GFMS, Hedge Fund
Research, Preqin, World Federation of Exchange, World Gold Council. 10 Bloomberg and SSGA.
State Street Global Advisors 4
Good as Gold Re-Appraising Strategic Allocations to Gold
Figure 6: GLD® Standard Performance
Ticker Fund Name As of 1 Month QTD YTD 1 Year 3 Year 5
Year 10 Year Since Inception 11/18/2004
GLD SPDR Gold Shares NAV 12/31/2015 0.00% -4.74% -11.78% -11.78% -14.24% -5.89% 7.12% 7.77%
SPDR Gold Shares Market Value 12/31/2015 -0.45% -5.05% -10.67% -10.67% -14.44% -6.06% 7.00% 7.63%
LBMA Gold Price PM 12/31/2015 -0.18% -4.85% -12.11% -12.11% -13.84% -5.48% 7.52% 8.18%
Source:
spdrs.com, as of 12/31/2015.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will
fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
Index returns are unmanaged and do not
reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and other income.
Effective March 20, 2015, the SPDR Gold Trust (GLD) adopted the LBMA Gold Price PM as the reference benchmark price of gold in calculating the Net Asset Value
(NAV) of the Trust. Prior to that date, the Trust used the London PM Fix as the reference benchmark price in calculating the NAV.
Gross Expense Ratio: 0.40% The
gross expense ratio is the fund’s total annual operating expense ratio. It is gross of any fee waivers or expense reimbursements. It can be found in the fund’s most recent prospectus.
Index Definitions
BofA Merrill Lynch US Corporate Index
The BofA Merrill Lynch US Corporate Index tracks the performance of publicly issued US dollar denominated investment grade corporate debt.
BofA Merrill Lynch US Treasury Index
The BofA Merrill Lynch US Treasury Index tracks the
performance of US dollar denominated sovereign debt publicly issued by the US government.
Barclays Capital US Treasury Index
US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury. Treasury bills are excluded by the maturity constraint, but are part of a separate Short Treasury Index.
Barclays Global Aggregate Bond Index
The Barclays Global Aggregate Index
provides a broad- based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the Pan-European Aggregate, and the Asian- Pacific Aggregate Indices. The index also includes
Eurodollar and Euro-Yen corporate bonds, Canadian government, agency and corporate securities, and USD investment grade 144A securities.
Barclays U.S. High Yield
Corporate Bond Index
The Barclays U.S. High Yield Index covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from countries
designated as emerging markets (sovereign rating of Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are included. The index
includes both corporate and non-corporate sectors.
Bloomberg Commodity Index
A broadly diversified commodity price index distributed by Bloomberg Indexes that tracks 22 commodity futures and seven sectors. No one commodity can compose less
than 2 percent or more than 15 percent of the index and no sector can represent more than 33 percent of the index.
Cambridge Associates Private Equity Index
A benchmark based on returns data compiled on U.S. private equity funds, including fully liquidated partnerships, formed between 1986 and 2014.
Dow Jones US Select REIT Index
A benchmark of U.S. REITs and REIT-like securities that screens
for market capitalization, liquidity and percentage of revenue derived from ownership and operation of real estate securities. It is float market cap weighted and quoted in dollars.
Dow Jones US Select REITs Total Return Index
A benchmark of U.S. REITs and REIT-like
securities that screens for market capitalization, liquidity and percentage of revenue derived from ownership and operation of real estate securities. It is float market cap weighted, quoted in dollars and reflects reinvested dividends.
HFRI Fund Weighted Composite Index
A global, equal-weighted index of over 2,000 single-manager
funds that report to Hedge Fund Research Inc.’s database. The HFRI Fund Weighted Composite Index does not include Funds of Hedge Funds.
State Street Global
Advisors
Good as Gold Re-Appraising Strategic Allocations to Gold
LBMA Afternoon Gold Price
The LBMA Gold Price is determined twice each business day (10:30
a.m. and 3:00 p.m. London time) by the participants in a physically settled, electronic and tradable auction.
MSCI EAFE Index
An equities benchmark that captures large- and mid-cap representation across developed market countries around the world, excluding the U.S. and Canada.
MSCI Emerging Markets Index
The MSCI Emerging Markets Index captures large and mid-cap
representation across 23 emerging markets countries. With 834 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
MSCI USA Total Return Index
The MSCI USA Total Return Index is designed to measure the
performance of the large and mid-cap segments of the
US market, with dividends reinvested. With 631 constituents, the index covers approximately 85 percent of the
free float-adjusted market capitalization in the US.
Russell 2000 Index
A
benchmark that measures the performance of the small-cap segment of the U.S. equity universe.
S&P 500 Index
A popular benchmark for U.S. large-cap equities that includes 500 companies from leading industries and captures approximately 80 percent coverage of available market
capitalization.
S&P Goldman Sachs Commodity Index, or S&P GSCI
A
production-weighted index launched in 1992 that tracks the performance of 24 commodity futures contracts. The index, tilts to commodities that are more heavily produced globally, so its weights more heavily to, say, crude oil than to cocoa.
US 3-Month Libor (Cash)
Libor, or the London Interbank Offered Rate, is
equivalent to the federal funds rate, or the interest rate one bank charges another for a loan. It is used as a reference figure for corporate financial transactions and, increasingly, for consumer loans as well.
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Good as Gold Re-Appraising Strategic Allocations to Gold
ssga.com | spdrs.com
For public use.
State Street Global Advisors One Lincoln Street, Boston, MA 02111-2900. T: +1 866 787 2257.
Important Risk Information
ETFs trade like stocks, are subject to investment
risk, fluctuate in market value and may trade at prices above or below the ETFs’ net asset value. Brokerage commissions and ETF expenses will reduce returns.
Diversification does not ensure a profit or guarantee against loss.
Commodities and commodity-index linked securities may be affected by changes in overall market movements, changes in interest rates, and other factors such as
weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.
While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods
of market stress.
The views expressed in this material are the views of Intermediary Business Group through the period ended December 31, 2015 and are subject
to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or
developments may differ materially from those projected.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents
disclosed to third parties without SSGA’s express written consent.
Standard & Poor’s®, S&P® and SPDR® are registered trademarks
of Standard & Poor’s Financial Services LLC (S&P); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by S&P Dow Jones Indices LLC (SPDJI) and
sublicensed for certain purposes by State Street Corporation. State Street Corporation’s financial products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and third party licensors and
none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of any index.
The gross expense ratio is the fund’s total annual operating expense ratio. It is gross of any fee waivers or expense reimbursements. It can be found in the fund’s most
recent prospectus. Past performance is not a guarantee of future results.
Investing in commodities entails significant risk and is not appropriate for all
investors.
Important Information Relating to SPDR Gold Trust (“GLD®”):
The SPDR Gold Trust (“GLD®”) has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for the
offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents GLD has filed with the SEC for more complete information about GLD and this offering. You may get
these documents for free by visiting EDGAR on the SEC website at sec.gov or by visiting spdrgoldshares.com. Alternatively, the SPDR Gold Trust or any authorized participant will arrange to send you the prospectus if you request it by calling
866.320.4053.
GLD is not an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and is not subject to regulation
under the Commodity Exchange Act of 1936 (the “CEA”). As a result, shareholders of the Trust do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act or the protections afforded
by the CEA.
GLD shares trade like stocks, are subject to investment risk and will fluctuate in market value. The value of GLD shares relates directly to the value
of the gold held by GLD (less its expenses), and fluctuations in the price of gold could materially and adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be more or less
than the value of the gold represented by them. GLD does not generate any income, and as GLD regularly sells gold to pay for its ongoing expenses, the amount of gold represented by each Share will decline over time. Investing involves risk, and you
could lose money on an investment in GLD. Please see the GLD prospectus for a detailed discussion of the risks of investing in GLD shares. The GLD prospectus is available here.
The World Gold Council name and logo are a registered trademark and used with the permission of the World Gold Council pursuant to a license agreement. The World Gold Council is
not responsible for the content of, and is not liable for the use of or reliance on, this material.
For more information: State Street Global Markets, LLC, One
Lincoln Street,
Boston, MA, 02111 T: +1 866 320 4053 spdrgoldshares.com.
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FDIC Insured • No Bank Guarantee • May Lose Value
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© 2016 State Street Corporation. All Rights Reserved.
ID5656-IBG-17681 0416 Exp. Date:
04/30/2017 IBG.GLD.GAG.1216
SPDR® GOLD TRUST has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the Trust and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Trust or any Authorized Participant will arrange to send you the prospectus if you request it by calling toll free at 1-866-320-4053 or contacting State Street Global Markets, LLC, One Lincoln Street, Attn: SPDR® Gold Shares, 30th Floor, Boston, MA 02111.