A new ETN started trading today, symbol SPGH, the UBS S&P 500 Gold Hedged.
It tracks the S&P500 while providing a hedge against a declining U.S. dollar, gold hedged index.
SPGH will track the S&P 500 Gold Hedged Index, a benchmark designed to measure the performance of an investment strategy long the S&P 500 and hedged against fluctuations of the dollar relative to gold prices.
The gold futures are not held to maturity, but roll to the next designated contract on the fifth-to-last business day to expiration. The “roll” process occurs five times per year, however the ETN is rebalanced monthly so that notional value of the gold futures is equal to the value of the equity positions.
While monthly gold contracts are available, futures expiring in February, April, June, August, and December tend to be the most liquid
The Gold Hedged Index will outperform an unhedged S&P 500 when gold appreciate relative to the dollar and and underperform when gold depreciates. It has outperformed the unhedged S&P 500 by 9% per year since year 2000.
Thursday, January 28, 2010
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