The Solactive GLD Long USD Gold Index is being used as the basis for the new SPDR Long Dollar Gold Trust (GLDW) exchange traded fund, which is trading on the NYSE Arca. The index delivers a way to remove the potential impact of the dollar on gold prices by allowing investors to own gold in terms of a basket of non-US currencies.
Henning Kahre, head of Research, Solactive commented: “We are very excited to be providing GLDW with this new index. Gold is often used in portfolios as a diversifier and as a safe haven instrument for tail risk events. The new index offers investors exposure to gold as though they’ve purchased it in a basket of foreign currencies.”
The index is calculated and published in dollars. The index in terms of ounces of gold is based on 1 at the close of trading on the start date 3rd of January 2007. The target foreign currency weights making up the basket of the short position are reset every business day and are as follows: euro (57.6%), yen (13.6%), sterling (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%) and Swiss franc (3.6%). These currency weights are identical to those determined by the US Federal Reserve in 1978 and used in the Index of the Weighted-Average Exchange Value of the US dollar.
Solactive will also offer specialised ETF services such as the creation of Portfolio Composition Files (PCF) and IOPV/INAV calculations through the Solactive ETF Services unit.