Global X has introduced a new gold bullion currency-hedged exchange-traded fund (ETF), which will track the performance of the price of gold bullion currency-hedged into Australian dollars.
The Global X Gold Bullion (Currency Hedged) ETF, carrying the Australian Securities Exchange code GHLD, was launched today and will sit alongside the ETF provider’s current gold offerings, the Global X Physical Gold ETF (GOLD) and the recently launched Global X Gold Bullion ETF (GXLD).
It said the new fund offered investors a layer of protection against currency fluctuations and carried a low cost with a management fee of 0.35 per cent a year.
Global X investment analyst Justin Lin said with the Reserve Bank of Australia (RBA) taking a different approach to interest rates compared to its United States counterpart, currency hedging is once again becoming a live issue.
“With the US Federal Reserve and the RBA taking what appears to be diverging interest rate paths for 2025, currency hedging has become top of mind for many of our clients,” Lin said.
“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. GHLD offers an effective solution to that problem, allowing them to stay invested and also hedge against currency risk.”
He added recent years have been defined by economic uncertainty and persistent inflation, but gold had proven to be a dependable asset for capital preservation and portfolio diversification.
“Gold is a cornerstone of many Australian investment portfolios, especially in times of heightened market volatility,” he said.
“With prices breaking through the record level of US$3000 per ounce, some investors may question whether gold has reached its peak. However, we maintain history suggests there’s room for further gains.
“Adjusted for inflation, gold’s all-time high actually stands at US$3459, 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$3200.”
The new gold ETF expands Global X’s fund range to 42, covering core, thematic, commodities, income and cryptocurrency strategies, with the company now managing more than $9.5 billion in assets.