Russia has attacked Ukraine, launching missiles and airstrikes in several cities within Ukraine in an offensive that Russian President Vladimir Putin has said has goals of demilitarizing the country and toppling the government in Kiev, Wall Street Journal reports. Investors have scrambled out of stocks and into safe haven allocations such as government bonds and gold.
The S&P 500 had officially hit correction territory earlier this week but has dropped a further 1.2%, and the Dow Jones Industrial Average was down nearly 2%, shedding 674 points.
“Who wants to be dealing with high inflation, prospects of interest rates hikes, and war in Europe?” said Fiona Cincotta, senior financial markets analyst at City Index. “It just seems like it’s too much for investors to be able to swallow right now.”
Gold, typically a safe haven asset, has seen gold futures contracts rising 0.6%, at around $1,922.20 a troy ounce. The WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN) saw a spike in price today, peaking at $31.75 a share earlier, climbing nearly 1000 basis points.
Image source: ETFDB.com, data courtesy of FactSet
GDMN offers exposure to both gold miners equities and enhanced exposure to gold through leveraged futures contracts. It’s a fund that can enhance diversification within portfolios through both gold miners and gold futures which can provide a potential hedge against inflation.
The fund is actively managed and uses a model-based approach in investing in U.S.-listed gold futures contracts and global equity securities that derive 50% or more of their revenue from gold mining. GDMN also uses U.S.-listed gold futures contracts to enhance the fund’s capital efficiency, per the prospectus.
GDMN seeks to invest in a basket of gold miner issued securities that are typically weighted by market cap, and 90% of the fund’s net assets will be invested in gold miners while the remaining percentage will be to gold futures contracts which will also represent 90% of the fund’s net assets.
Country allocation includes Canada at 47.82%, the United States at 28.26%, Australia at 11.06%, South Africa at 6.87%, the United Kingdom at 3.45%, China at 1.45%, Peru at 0.66%, and Jersey at 0.43%.
GDMN carries an expense ratio of 0.45%.
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