Global X launches first-ever currency hedged Gold ETF for Aussie investors

Exchange traded funds (ETF) specialist Global X has expanded its stable of physical gold-pegged EFT products, touting its newly launched ETF as the “lowest-cost fund of its kind in Australia”.

The Global X Gold Bullion (Currency Hedged) ETF (GHLD) tracks the performance of gold bullion price currency-hedged into Australian dollars – a unique feature among its physical gold-tracking product suite in Australia.

The GHLD joins Global X’s existing suite of gold-backed products available to Australian investors, including its flagship Global X Physical Gold (GOLD) fund, recognised as the world’s first gold-backed exchange-traded product, and the more recently launched Global X Gold Bullion ETF (GXLD).

Global X touts its newly launched GHLD as the “lowest-cost fund of its kind in Australia”, attracting a management fee of 0.35% per annum. Its complementary GOLD takes a 0.40% cut, while the longer-term investment-focused GXLD, promoted by Global X as the “lowest cost physically backed gold exchange traded product in the market”, attracts a fee of 0.15%.

The GHLD, unlike Global X’s other physical gold-pegged products, is currency hedged, ensuring investor gains are not eroded by a rising AUD.

Global X notes that currency hedging has become a “top of mind” priority for many of its clients, providing a hedge against the diverging policy rates of the US Federal Reserve and the Reserve Bank of Australia.

“Investors want to stay exposed to gold during this time of volatility, but at the same time, they are increasingly concerned that the Australian dollar could start to rise,” said Global X investment analyst Justin Lin.

“GHLD offers an effective solution to that problem, allowing them to stay invested and also hedge against currency risk.”

Recognising gold’s proven reliability as a portfolio hedge – a “cornerstone of many Australian investment portfolios” – Lin added that the asset remains for many investors a “reliable asset for capital preservation and portfolio diversification”.

While the gold price is currently trading at an all-time (pre-inflation adjusted) high of US$3,115 (U$4,939) per ounce, up more than 44% in the year to date, Global predicts “room for further gains”, as equity markets brace for further volatility.

“Adjusted for inflation, gold’s all-time high actually stands at US$3,459, set in 1980 – meaning its current valuation could still be well within reason.

“If equity markets continue to experience turbulence, there is a possibility we could see the gold price rise to US$3,200.”

GHLD expands Global X’s ETF product suite to 42, with the company overseeing more than $9.5 billion in assets under management in Australia.