Strategy Shares launches Gold-Hedged Bond ETF

Strategy Shares, a family of exchange traded funds (ETFs) focused on bringing non-traditional strategies to the ETF marketplace, has launched the Strategy Shares Gold-Hedged Bond ETF (GLDB). 

The new ETF seeks to generate investment results that correlate, before fees and expenses, to the performance of the Solactive Gold-Backed Bond Index.

GLDB’s investment strategy is premised on the proposition that an investment in gold can potentially provide a hedge against inflation for a bond investment. The Index seeks to provide 100 per cent exposure to the US dollar-denominated investment grade corporate bond sector (the “Bond Component”) plus a gold inflation hedge with a notional value designed to correspond to the value of the Bond Component, with notional value reset on a monthly basis (the Gold Hedge Component).

David Miller, Strategy Shares Portfolio Manager for GLDB, says: “Since 1973, following the end of Bretton Woods System, the value of the US dollar has eroded by more than 80 per cent because of inflation. Combine that with the fact that in recent decades the money supply has grown at an unprecedented rate, with M1 Money Supply increasing by more than 1200 per cent since 2008, and you have consumers dealing with the impacts of a significant loss of purchasing power. With GLDB, we combine a gold overlay with bonds in one portfolio to give investors what we believe is an optimum way to generate income while maintaining purchasing power.”

The Bond Index aims to mirror the performance of investment grade corporate bonds issued in US dollars. The Gold Hedge Index tracks the performance of the near month gold futures contracts listed on the Chicago Mercantile Exchange.