This week, all eyes were of Federal Reserve Chairwoman Janet Yellen as she testified before the House on the Semiannual Monetary Policy Report on Tuesday; Yellen is also scheduled to speak today in front of the Senate. On the ETF front, issuers continued to fill the product pipelines, debuting several first-to-market products. On Tuesday, AdvisorShares added to its impressive lineup of actively managed funds, launching four new gold ETFs [25 Ways to Invest in Gold with ETFs in 2014].
AdvisorShares teamed up with Dennis Gartman, writer of the well-known Gartman Letter, and Treesdale Partners, experts in managing currency/commodity based alternative investment products, to roll out a suite of gold ETFs. Each of the funds provide gold exposure in different currency terms by utilizing gold and currency futures:
- Gartman Gold/Euro ETF (GEUR): This fund seeks to provide positive returns by utilizing the euro to invest its assets in the gold market. The fund charges 0.65% in expenses.
- Gartman Gold/British Pound ETF (GGBP): Similar to GEUR, this fund seeks to provide positive returns by utilizing the British pound to invest in the gold market.
- Gartman Gold/Yen ETF (GYEN): This ETF utilizes the Japanese yen to invest in gold futures. Like GEUR and GGBP, it also charges 0.65%.
- International Gold ETF (GLDE): This fund seeks to provide positive absolute returns by investing in ETPs that provide diversified exposure to the international gold market. The fund may invest in GEUR, GGBP, and GYEN, as well as other non-Advisor share ETPs and closed-end funds. The fund charges an expense ratio of 1.52%.
Commenting on the methodologies behind the new funds, Dennis Gartman stated “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” [see ETF Technical Trading FAQ].
Managing director of Treesdale Ade Odunsi also noted “By choice or not, many gold investors today explicitly express that they expect the value of gold to increase relative to the U.S. 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 U.S. 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 U.S. dollar.”
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Disclosure: No positions at time of writing.