When investors try to hedge gold on their own, they may have poor timing, often getting in our getting out of the position during the worst periods possible. On the other hand, the gold hedged S&P 500 ETF will take a 100% position in gold futures along with 100% in equities, allowing investors to enjoy the long-term benefits of both gold and stock growth while also gaining exposure to the negative correlation between the two assets to diminish portfolio risk during short-term bouts of volatility.
Through this layered gold portfolio approach, investors may find that there is a much lower opportunity cost for protection than a dedicated gold position.
So far this year, GHS’ dual gold and equity strategy has been outperformed, rising 24.4% year-to-date, compared to the 14.7% gain in the S&P 500.
For more information on the gold market, visit our gold category.