Strategy layers gold futures exposure on top of U.S. equities
NEW YORK, March 17, 2022 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (NASDAQ: WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager, announced today the launch of the WisdomTree Efficient Gold Plus Equity Strategy Fund (GDE), an actively managed ETF with an expense ratio of 0.20%. GDE provides exposure to a basket of U.S. equity securities of large-capitalization companies, generally weighted by market capitalization, with capital efficient¹ exposure to gold futures added on top.
Investors seeking to diversify their equity exposure will often allocate to fixed income or alternative assets, like gold, in separate trades – requiring two separate outlays of capital. WisdomTree believes that GDE is an innovative and capital efficient alternative for large cap U.S. equity, multi-asset, or alternative ETFs.
“We are anticipating sustained elevated inflation over the next three to five years, and with historically low global interest rates and high inflation comes the need for diversification to hedge macro risks,” said Jeremy Schwartz, Global Chief Investment Officer at WisdomTree. “We believe gold exposure is an important strategic diversifier for equity portfolios, but the challenge for long-term equity bulls has been a lack of desire to reduce core allocations to stocks to fund positions in gold. With GDE, investors can now add gold exposure on top of a traditional core stock allocation. In addition, GDE provides further leverage to our capital efficient suite of funds that started with stock and bond efficient combinations.”
GDE: What’s under the Hood?
To help magnify the potential benefits of the asset allocation, the strategy layers gold futures exposure on top of U.S. equities.
- Large-Cap U.S. Equity Basket – For every $100 invested, $90 is invested in U.S. equity securities of large-capitalization companies generally weighted by market capitalization
- Gold Futures – $90 of U.S. listed gold futures contracts overlay the $90 of equity exposure and $10 of cash collateral
- Cash Collateral – $10 is kept in high-quality, short-term U.S. money market securities that earn returns comparable to U.S. Treasury bills
- Leverage – Based on this structure, the total accounting leverage of the strategy is enhanced to 1.8x, as for every $100 invested there is $180 of total exposure to equities and gold futures
For more information on GDE, visit: https://www.wisdomtree.com/etfs/capital-efficient/gde
Accounting leverage refers to the fact that the total asset exposure of the strategy is enhanced to 1.8x. Enhancing or magnifying gains and losses and causes the Fund to be more volatile than if it had not been leveraged and entails a heightened risk of loss.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. To obtain a prospectus containing this and other important information, please call 866.909.9473 or visit WisdomTree.com. Read the prospectus carefully before you invest.
There are risks associated with investing, including possible loss of principal. The Fund is actively managed and invests in U.S.-listed gold futures and U.S. equity securities. The Fund’s use of U.S.-listed gold futures contracts will give rise to leverage, magnifying gains and losses and causing the Fund to be more volatile than if it had not been leveraged. Moreover, the price movements in gold and gold futures contracts may fluctuate quickly and dramatically, and have a historically low correlation with the returns of the stock and bond markets. U.S. equity securities, such as common stocks, are subject to market, economic and business risks that may cause their prices to fluctuate. The Fund’s investment strategy will also require it to redeem shares for cash or to otherwise include cash as part of its redemption proceeds, which may cause the Fund to recognize capital gains. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.
Diversification does not eliminate the risk of experiencing investment losses.
WisdomTree Funds are distributed by Foreside Fund Services, LLC, in the U.S. only.
Jeremy Schwartz is a registered representative of Foreside Fund Services, LLC.
About WisdomTree
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 $78 billion in assets under management globally.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
Contact Information
Media Relations
WisdomTree Investments, Inc.
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com / wisdomtree@fullyvested.com
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¹ Capital efficiency: The ability for an investment strategy to gain exposure to a particular market while using fewer assets.
