New ETF issuer Wilshire Phoenix looking to launch innovative gold ETF

William Cai, Wilshire Phoenix

Earlier this month Wilshire Phoenix filed an amendment to the Registration Statement for its Wilshire wShares Enhanced Gold Trust, marking another step in the preparation of the launch of its first ETF product.

Established in 2018, Wilshire Phoenix was founded by principal partners who have institutional finance backgrounds. William Cai, one of the partners and founders, explains that he was a trader at JPMorgan for over 10 years, managing billion-dollar risk portfolios across different asset classes including credit, equities, and most recently in commodity futures. 

“The partners who formed Wilshire Phoenix got together and thought: ‘let’s do something on our own’,” Cai says. “We wanted to try and create something that retail investors are looking for but that doesn’t exist in the market.”

Cai had created strategies in the past for hedge funds, endowments, pension funds and other large institutional clients and is now applying that experience to Wilshire Phoenix’s ETF vehicle. 

The Wilshire team has their current focus on a gold ETF. The product development began prior to the Covid pandemic because they saw a clear lack of innovation in the gold ETF space.  The regulatory review process of the new ETF means that Cai cannot reveal much about it but describes it as ‘an innovative ETF’.

“Our overall framework at Wilshire Phoenix is to bring this institutional level of technology to the retail market,” Cai says. “One thing we had been looking at is that, across asset classes, volatility can be a tricky thing for retail investors.”

“It’s great for big banks, but for retail investors, it’s very difficult for them when prices are seesawing around and they buy and sell at the wrong time. It’s very difficult for investors to navigate, and even though gold is a safe haven asset, it can be quite volatile.”

The design behind their innovative gold ETF is based on creating something that is intended to mitigate the risk of volatility from the asset class while trying to improve overall performance.

“These products will not be trading products with leverage,” he says. “These are products designed for the long haul that investors can hold onto for a year or longer term, which systematically reduce the risk in terms of the volatility.”

The observer might feel that Wilshire Phoenix is a little late to the party with a gold ETF, the gold price having soared and now flattened over the summer. 

“The gold price is currently in consolidation,” Cai says. “But our view is that in terms of gold there are still a lot of strong supporting factors with the low interest rate environment and economic uncertainty. Further, we created the gold product prior to Covid and the price rally. It is a product aimed to help investors during any market period and for the long haul.”

The firm has plans to launch other products drawn on their institutional past and their retail presence. Depending on SEC review process, Wilshire is looking to launch the wShares Enhanced Gold Trust later this year.

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