Daily ETF Watch: Asian Gold Fund To Close

ETF Securities’ AGOL will shut down in mid-August.

Reviewed by: Heather Bell
Edited by: Heather Bell

ETF Securities announced recently that it would be shutting down one of its gold funds on August 14. The ETFS Physical Asian Gold Trust (AGOL | B-100) launched in January 2011 and had accumulated only about $50 million in assets under management as of a month ago.

AGOL also suffered from poor liquidity. Now, with just a month of trading left to the fund, its assets have already fallen below $12 million.

AGOL holds physical gold, just like the SPDR Gold Trust (GLD | A-100), but that gold is vaulted in Singapore, which was the key point of differentiation. Investors concerned about the security of physical gold investments based in the U.S. could find peace of mind and a kind of diversification by purchasing shares of gold that was stored overseas. It was even priced at one basis point below GLD.

In 2009, ETFS rolled out the ETFS Physical Swiss Gold Trust (SGOL | A-100), and that fund has gathered more than $870 million in AUM. SGOL vaults its gold in Zurich, Switzerland, which apparently holds more appeal for investors than gold vaulted in Singapore.

AGOL’s liquidation will bring the total number of fund closures so far this year to nearly 70 funds. Just for perspective, 2014 saw a total of 88 closures by year’s end.

WisdomTree Launches Strong/Weak $ Fund Pair

Today saw the launch of two equity funds by WisdomTree that respectively target stocks that will do well when the dollar is strengthening and stocks that will do well when it is weakening. The WisdomTree Strong Dollar U.S. Equity Fund (USSD) and the WisdomTree Weak Dollar U.S. Equity Fund (USWD) are the first funds of their kind.

USSD targets domestic companies that rely heavily on their U.S.-generated revenues. It includes companies that generate at least 80 percent of their profits within the United States, according to the prospectus. Essentially, when the dollar is strengthening, companies with significant domestically generated revenues will do better than those that rely on exports.

Companies included in USSD’s index must have market capitalizations of at least $5 billion and meet certain liquidity thresholds. Components are weighted by a modified-market-capitalization approach that overweights companies with higher correlations to a strong dollar.

USWD, on the other hand, focuses on companies that generate at least 40 percent of their revenues from foreign countries. When the U.S. dollar is weakening, such companies will have an advantage as it will make their products cheaper in foreign markets. The index has similar market cap and volume requirements for components to USSD’s underlying benchmark, but components are weighted more heavily based on their inverse correlation to the U.S. dollar.

Both of the funds come with an expense ratio of 0.33 percent.

FLAG Changes Index, Exchange
The Forensic Accounting ETF (FLAG), launched by Exchange Traded Concepts in 2013, has changed both its underlying index and its exchange of primary listing.

As of today, the fund is now listed on the Nasdaq stock exchange, having moved there from the NYSE Arca.

Further, as of July 15, the fund switched from tracking the Del Vecchio Earnings Quality Index to tracking the WeatherStorm Forensic Accounting Long-Short Index. The new index tracks the top 500 U.S. stocks in terms of market capitalization, taking short positions in companies exhibiting “red flags” in the form of aggressive accounting processes.

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.