State Street Global Advisors (SSGA) and World Gold Council, the market development organization for the gold industry, begun trading a new Currency-Hedged Gold ETF, the SPDR Long Dollar Gold Trust (NyseArca: GLDW), on Monday, January 30, 2017. Here is a synopsis of the new ETF:
|Symbol: GLDW||Exchange: NYSE ARCA|
|Name: SPDR Long Dollar Gold Trust||Net Expense Ratio: 0.50%|
The SPDR Long Dollar Gold Trust seeks to track the performance of the Solactive GLD Long USD Gold Index, less fund expenses.
The Solactive GLD Long USD Gold Index is a transparent, rules-based index published by Solactive AG (Index Provider). The Index seeks to track the daily performance of a long position in physical gold (as represented by the Gold Price) and a short position in a basket (FX Basket) of non-U.S. currencies (i.e.,a long USD exposure versus the FX Basket). Those non-U.S. currencies consist of the following which are weighted according to the Index: euro, Japanese yen, British pound sterling, Canadian dollar, Swedish krona and Swiss franc.
The value of gold and the Reference Currencies comprising the FX Basket are based on publicly available, transparent prices — for gold, the LBMA Gold Price AM; for currencies, the WMR Fix.
In simple terms, the Index reflects the price of Gold in U.S. dollars adjusted by the price of each Reference Currency comprising the FX Basket against the U.S. dollar. The Index is designed to measure daily Gold Bullion returns as though an investor had invested in Gold Bullion in terms of the FX Basket comprised of the Reference Currencies reflected in the Index. In general, the Index is intended to increase in value when the price of gold (as measured by the Gold Price) increases and/or when the value of the USD increases against the value of the FX Basket comprised of the Reference Currencies.
In general, the Index is intended to decrease in value when the price of gold (as measured by the Gold Price) decreases and/or when the value of the USD declines against the value of the FX Basket comprised of Reference Currencies. The net impact of these changes determines the value of the Index on a daily basis.
The gold bullion is held by the Custodian, HSBC Bank plc, in its London vault. The Fund’s gold bullion is kept in the form of London Good Delivery bars (~400 oz.) and held in an allocated account.
GLDW Home Page
Category: Commodities> Precious Metals> Gold> Physical Gold
“GLDW is the first ETF listed in the US backed by physical gold that is designed to hedge the movement of gold against the U.S. dollar,” said Joseph Cavatoni, Principal Executive Officer of GLDW’s sponsor, and Managing Director USA and ETFs, World Gold Council.
Here is a comment from Nick Good, co-head of the Global SPDR business at State Street Global Advisors:
“The price of gold and the US dollar have historically tended to move in opposite directions. “By lessening the dollar’s potential impact on gold, GLDW seeks to provide investors the opportunity to
realize the potential benefits of using gold as a strategic portfolio diversifier, while offering the ability to buffer against the potential adverse effects of a strong dollar on gold.”
In November 2004, the World Gold Council through a US subsidiary and State Street Global Advisors launched SPDR Gold Shares (GLD), the first US traded gold ETF and the first US-listed ETF backed by a physical asset. GLD attracted more than $1 billion in assets in its first 3 trading days. Listed on the NYSE Arca, in addition to exchanges in Singapore, Tokyo, Hong Kong and Mexico, GLD remains the largest gold ETF with approximately $30.6 billion3 in assets under management backed by physical gold bullion.