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AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), has unveiled an industry-first suite of ETFs providing gold exposure in different currency terms.
Launched in partnership with Dennis Gartman, editor and publisher of The Gartman Letter, and Treesdale Partners, a New York-based registered investment advisor with expertise in managing currency/commodity-based investment products, the ETFs seek to provide positive returns by utilizing liquid, non-US dollar currencies to invest in the gold market.
The four ETFs, which have been listed on the NYSE Arca, are:
AdvisorShares Gartman Gold/Euro ETF (GEUR)
AdvisorShares Gartman Gold/British Pound ETF (GGBP)
AdvisorShares Gartman Gold/Yen ETF (GYEN)
AdvisorShares International Gold ETF (GLDE)
In pursuing the GEUR, GGBP and GYEN investment strategies, Treesdale will provide access to a popular investment approach from Mr. Gartman: using different currencies to fund a gold position. GEUR utilizes the euro; GGBP utilizes the British pound; GYEN utilizes the Japanese yen.
The foreign currencies are obtained through the sale of either exchange-traded currency futures or “over the counter” foreign exchange forward contracts. The funds alternate currency exposure seeks to neutralize US dollar risk, and assesses the dollar and corresponding foreign currency yield curve, determining the most positive net effect to purchase gold in different currency terms.
The investment objective of GLDE is to provide positive absolute returns by investing in exchange-traded products (ETPs) that provide diversified exposure to the international gold market. In pursuing the GLDE investment strategy, Treesdale will provide access to currency diversification, rather than using the US dollar exclusively, actively allocating its underlying gold positions to seek consistently attractive valuations.
Noah Hamman, chief executive officer of AdvisorShares, said: “Dennis Gartman’s widely recognized analysis and commentary among leading corporate, financial and trading institutions is well-known, and we believe Treesdale adds another deeply experienced portfolio manager to the AdvisorShares active ETF suite. We are pleased to partner with their combined expertise in bringing more innovative investment solutions to the active ETF marketplace.”
Ade Odunsi, managing director of Treesdale and portfolio manager of the four funds, commented: “By choice or not, many gold investors today explicitly express that they expect the value of gold to increase relative to the US dollar. As a result, investors are exposed to risk factors that affect the supply and demand for gold, as well as the various factors that might impact the value of the US dollar on international currency markets. With these active ETFs, we believe investors now have unprecedented access to efficiently hold gold in different currency terms to avoid undesired and concentrated exposure to a single currency, such as the US dollar.”
Dennis Gartman added: “Throughout the course of my career, I’ve discovered first-hand that a diligent and comprehensive approach to trading and investing can deliver positive returns to a diversified investment portfolio. Among those lessons, I’ve learned that owning different commodities, especially gold, in different currency terms can provide added-value for any investor’s alternative allocation.”
GEUR, GGBP and GYEN have net expense ratios of 0.65%. GLDE, owing to the acquired fees of underlying ETPs, has an expense ratio of 1.52%.