Here’s How 4 Smart Beta Gold ETFs Are Performing

October 13, 2016

This has been a good year for gold ETF investors, who’ve piled into funds such as the SPDR Gold Trust (GLD)—the largest physical gold ETF in the world and 2016’s most popular ETF, with net creations exceeding $12 billion so far—and reaped nearly three times the returns of the S&P 500.

It has also been a good year for investors opting for some of the newer-to-market, smart-beta approaches to gold—ETFs that offer exposure that goes beyond physical gold, gold futures or even gold-related companies. But in this category, dispersion in returns is a good reminder of performance drivers and how deviating from simple exposures translate into sometimes-better, sometimes-worse results.  

The chart below shows the year-to-date performance of GLD relative to the SPDR S&P 500 (SPY):

Gold/Equity Hedged ETFs

In the ETF market, GLD is the behemoth choice for most investors, but there are some off-the-beaten-path gold strategies that are delivering some really interesting results.

Consider a pair of equity-hedged gold ETFs: the REX Gold Hedged S&P 500 (GHS), which offers long exposure to S&P 500 stocks and gold in one ETF wrapper; and the REX Gold Hedged FTSE Emerging Markets (GHE), which does the same as GHS but with emerging market stocks.

Both funds are actively managed and are still new to market, having launched only last April. They are also small. GHS has only $4 million in assets while GHE has $3 million.

But look at their performances since inception relative to GLD:


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