Cboe’s 3 Questions in 3 Minutes: Efficient Gold Strategies

CBOE: 

What are the investment objectives of the WisdomTree Efficient Gold Strategies?

Kara Marciscano: 

GDE and GDMN both seek to deliver a capital efficient investment strategy. GDE provides exposure to a market capitalization weighted basket of the largest 500 U.S. equities with gold futures exposure layered on top. GDMN provides exposure to a modified market cap weighted basket of global gold miners equities, also with gold futures exposure layered on top. Both strategies’ construction can be simplified to the following scenario: For every $100 invested, each Fund seeks to invest approximately $90 in the equity basket or gold miners equity basket respectively, and then $10 into short-term collateral. Where the Capital Efficiency comes in, is in addition to that exposure, $90 in gold futures are layered on top in each strategy, for $180 of exposure.

CBOE:

Why consider gold now?

Kara Marciscano:

Investors often allocate to gold during cycles of turbulence as a tactical move to hedge against financial, geopolitical, or inflation risks. With historically low global interest rates, but high inflation, investors may be seeking portfolio diversifiers to hedge macro risks. At WisdomTree, we view gold exposure as a well-suited solution.

CBOE: 

How should I utilize these products in my portfolio allocation?

Kara Marciscano:

GDE provides a capital efficient strategy that can be used as a replacement for large cap U.S. equity, multi-asset, or alternative ETFs. Whereas GDMN can be used to provide comprehensive exposure to gold in capital-efficient manner that requires less capital than required to allocate to gold, and gold equities or gold miner ETFs, in two separate transactions.

Before investing, carefully consider a Fund’s investment objective, risk, charges and expenses contained in the prospectus available on WisdomTree.com. Read carefully.