Bringing you live news and features since 2006 

Standard & Poor’s launches S&P 500 Gold Hedged Index

RELATED TOPICS​

With the returns of gold rivaling that of the US equity market, Standard & Poor’s has launched the S&P 500 Gold Hedged Index.

The index seeks to simulate the returns of an investment strategy which is long the total return of the S&P 500 stock market index and long gold futures contracts, allowing investors to participate in the returns of the US equity market while hedging against a decline in the value of the US dollar versus gold.  
 
Standard & Poor’s has licensed UBS to create and launch investment products based upon the index.
 
“In a gold-hedged strategy, investors are seeking to eliminate the risk of US dollar fluctuations and are therefore willing to sacrifice potential currency gains against gold,” says Liz Taxin, director of strategy indices at S&P Indices. “By holding long gold futures contracts, investors stand to gain when the US dollar loses value as expressed in the dollar price of gold.”
 
The S&P 500 Gold Hedged Index is calculated as a combination of a long S&P 500 position overlaid with a long position in Comex gold futures. The hedge only protects against adverse movements in the relative value of the US dollar, as expressed in the dollar price of gold. Stock market risk is not hedged in any way.
 
The results of a gold-hedged index strategy, versus that of an un-hedged strategy, vary depending upon the movement of the gold futures contract and the US dollar. By holding long gold futures contracts, investors may gain when the US dollar loses value as expressed by gold. Conversely, they may lose when the opposite occurs.
 
The index is rebalanced monthly to equalize notional exposure to equity and gold. The positions are rebalanced to equal weights on the day of rebalancing.

Latest News

News came last night from the US that the SEC has approved CBOE’s proposal to list and trade VanEck’s spot..
Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15 per cent increase in net..
European white label ETF platform, HANetf, has announced its total assets under management (AUM) has now exceeded USD4.31 billion...
New research from European ETF provider Tabula Investment Management shows investors are expecting improvements in ESG from the gold mining..

Related Articles

Timothy Rotolo, Range Funds
In 2023, Timothy Rotolo launched his business, Range Fund Holdings, the parent company for Range Indices and Range ETFs, followed...
Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by