WisdomTree is expanding its line of cross-asset ETFs with a blend of large cap stocks and gold futures.
The WisdomTree Efficient Gold Plus Equity Strategy Fund (GDE) debuted on the Cboe Global Markets on Thursday with a 0.20% expense ratio.
The fund invests in a subsidiary in the Cayman Islands that holds a representative basket of large cap equities and U.S.-listed gold futures contracts.
Using an accounting leverage strategy, WisdomTree claims that every $100 put into the fund by an investor will generate $180 worth of exposure. The first $90 is allocated to equities, and the remaining $10 is equated to be worth $90 in exposure due to built-in leverage within the subsidiary’s selected gold future contracts.
“The idea is, in this yield starved environment and inflationary environment, how do you provide more capital-efficient portfolios?” WisdomTree Chief Investment Officer Jeremy Schwartz said in an interview. “Stocks and gold seemed like a very natural extension of our first capital-efficient family.”
GDE is the fifth in WisdomTree’s “Efficient Core” line of ETFs that blend equities with exposure to leveraged forms of other asset classes. The second most recent launch was the WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN), which launched in mid-December and tracks gold mining stocks and gold futures in a single package.
While GDMN has produced returns of 16% year-to-date, the WisdomTree International Efficient Core Fund (NTSI) combining non-North American developed market equities with U.S. bonds has lost 13%, and the WisdomTree Emerging Markets Efficient Core Fund (NTSE) holding emerging market stocks and Treasurys has lost 18.37%.
The oldest ETF in the family is the WisdomTree U.S. Efficient Core Fund (NTSX), which debuted in August 2018. While it has lost 14.69% year-to-date, it has a net gain of 15.42% over its lifetime.