SSGA launches unlisted gold fund
State Street Global Advisors (SSGA) has launched an unlisted managed gold fund.
The State Street Gold Fund will track the performance of the spot gold price (LBMA Gold Price PM in Australian dollars) by investing in securities that are backed by securely held physical gold bullion.
The holding of physical gold bullion is a cost-efficient and secure way for investors to gain access without having to pay for transportation, insurance and storage associated with holding physical gold directly.
Management cost for the unlisted managed fund is at 0.14 per cent per annum, and it will be seeded by ANZ Private Bank.
State Street Global Advisors’ head of investments in Australia, Jonathan Shead, said: “Gold has never gone away as a diversifying allocation of an investment portfolio, but today’s heightened climate of economic and geopolitical uncertainty has brought its role to the fore.
“Investors tend to use gold as a potential hedge against market volatility and for its potential diversification benefits when included in a traditional portfolio of equity and fixed income assets.”
ANZ Private Bank’s chief investment officer, Lakshman Anantakrishnan, said the decision by the bank to allocate a portion of its portfolio to gold was driven by a desire to improve the risk characteristics of its multi-asset portfolios.
“Typically, rising real yields and a strong dollar spell trouble for the precious metal, but safe haven demand is rising, and some governments and central banks are looking to diversify their reserve assets away from the dollar. For investors, the asset class can play a similar role during periods of uncertainty, helping add diversification to portfolios given its historically low or negative correlation to most other asset classes.”
Money Management previously wrote how ETF provider Global X was set to expand its range of gold ETFs with a currency hedged version of its physical gold ETF. This will be launched in the third quarter of calendar year 2024.
Its unhedged version was launched in 2003 and stood at $3 billion in net assets.
AUTHOR
Laura Dew
Recommended for you
Vanguard and State Street have debated active ETFs, and whether they are the next vehicle for growth, or forever in the shadow of index-tracking funds.
The conversion of the Magellan Global Fund units has contributed to $0.7 billion in outflows for the fund manager in August.
Australia could see a rate cut by Christmas, according to AMP’s Shane Oliver, if consumer price index inflation falls faster than expected.
Ahead of her keynote address at the Women in Finance Summit 2024, Ella Baché CEO Pippa Hallas reveals the secrets to building a business empire that embraces disruption.
