When allocating to alternative investments, like gold, market participants often grapple with how much of their portfolios should be devoted to those assets. They also wonder whether it’s their equity or fixed income sleeves that will be subject to pruning.
Some ETFs make that decision easier. For example, the WisdomTree Efficient Gold Plus Equity Strategy Fund (GDE) provides exposure to both gold futures. It also provides exposure to a basket of domestic stocks comparable to the S&P 500. It’s an approach that’s served well investors this year. GDE, which turned three years old in March, is higher by 22.05%. That confirms that the gold overlay has boosted performance relative to owning a traditional S&P 500 ETF on a stand-alone basis.
GDE could be all the more alluring for investors. And that’s not just because it combines bullion and stocks. That’s an attractive point to be sure. But it’s also because the state of fiscal affairs in the U.S. suggests the yellow metal could be an important portfolio over the long term. For example, President Trump’s “big, beautiful bill” doesn’t do much in terms of cutting government spending. That could imply more monetary debasement is in store. And that could serve as a catalyst for higher gold prices.
GDE Catalysts Emerging
Another issue working in favor of gold and ETFs such as GDE is concern that President Trump wants to diminish the independence of the Federal Reserve. He’d like Chairman Jerome Powell to lower interest rates. That’s something that could be difficult without substantial decreases to government expenditures.
Nitesh Shah, head of commodities & macroeconomic research, Europe at WisdomTree, recently told Kitco News that the tug of war between Trump and Powell injects uncertainty into the market. That could compel more investors to embrace the yellow metal. Shah said there’s a pathway for gold to reach $4,000 per troy ounce in the first quarter of 2026. That’s particularly so if inflation remains sticky in the U.S. and if a recession comes to pass.
Other Factors at Play
There are other factors at play that support bull cases for gold and funds like GDE. For example, global central banks, particularly those in developing economies, remain devoted buyers of bullion. Conversely, data indicates many Western investors are missing out on gold’s rally. That’s because ETF flows data in North America and Europe indicate tepid buying or modest selling of bullion funds. Should that scenario reverse in earnest, it’d likely spark gold higher and do the same for ETFs such as GDE.
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