On Thursday, WisdomTree Investments, Inc. announced the launch of the WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN), an actively managed ETF.
GDMN invests in a portfolio comprised of global equity securities issued by companies in the gold mining business, generally weighted by modified market capitalization, and U.S.-listed gold futures contracts. GDMN utilizes the gold futures to enhance its capital efficiency. WisdomTree believes that GDMN is an innovative and capital-efficient alternative to traditional gold miner ETFs or leveraged gold miner ETFs.
“With low global interest rates and inflation at the top of many investors’ minds, we believe gold is a commodity that can provide a valuable inflation hedge — it’s not just a ‘doomsday asset’ and it has the potential to perform well in cyclical markets,” said Jeremy Schwartz, Global Chief Investment Officer at WisdomTree.
He continues, “We’re constantly finding new ways to offer investors opportunities to invest in a variety of market conditions – in a rising interest rate environment, gold miners can have a potential attractive dividend yield. Blending gold futures and gold miners can extract positive traits from both, and we believe that the Fund is built for investors seeking portfolio diversifiers to hedge macroeconomic risks.”
A Golden Structure
GDMN provides exposure to a modified market capitalization-weighted basket of global gold miners with an overlay providing exposure to gold via investments in gold futures. It utilizes a unique structure where, for every $100 invested in GDMN, the fund seeks to invest $90 in gold miners and 90% in gold futures for $180 of gold-oriented exposures.
Using leverage and a ‘return stacking’ framework that layer gold futures on top of gold miners, GDMN seeks to provide these two exposures while enhancing capital efficiency.
Gold is known for performing particularly well in the second half of an inflation period.
GDMN has an expense ratio of 0.45%.
For more information on GDMN, an innovative capital-efficient alternative to traditional gold miner ETFs or leveraged gold miner ETFs, visit https://wisdomtree.com/
WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe (collectively, “WisdomTree”), is an ETF and ETP sponsor and asset manager headquartered in New York. WisdomTree offers products covering equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency and alternative strategies. WisdomTree currently has approximately $73.5 billion in assets under management globally.