wShares Enhanced Gold Trust (WGLD)
Physical gold ETP seeks to list next week.
SUMMARY & ANALYSIS
What is WGLD?
WGLD is a statutory trust that tracks a proprietary index that tracks physical gold price performance with reduced volatility and/or keeping correlation to S&P 500 (!?).
How does it do it?
The underlying index is composed of physical gold price and cash. The index ratio between gold and cash is calculated based on S&P500 and gold price volatility. More info on index here.
WGLD will replicate the index by holding physical gold and cash, and adjusting the amounts of each to reflect the index.
HEARSAY says:
The target market is unclear and as unarticulated as the methodology of the index. The strategy is esoteric, and those who are looking for such a strategy might be able to achieve it themselves.
The fact that the methodology is purposefully obfuscated so that it cannot be fully replicated (as stated in the prospectus) brings up the question of how the APs will be able to make tight enough markets without access to proprietary fund information?
WGLD comes across as a very clever solution in seek of a question.
Ticker: WGLD
Exchange: NYSE Arca
Expense ratio: 0.65%
Original filing date: February 14, 2020
Effective date: January 28, 2021
Listing Date: Week of February 15, 2021
CUSIP: 972005102
Active: No
Index: Wilshire Gold Index (Calculated by Solactive AG)
Investment Objective:
Track performance of
Wilshire Gold Index (patented), less fees and expenses.
Investment Strategy: It's complicated: inputs are
realized S&P 500 Volatility and LBMA Gold Price Volatility. Here's the [partial] calculation:
Constituents: LBMA gold price and cash.
Adviser: Wilshire Phoenix Funds
LLC (SPONSOR) - Delaware Trust Company (TRUSTEE)
Sub-Adviser: Exchange Traded Concepts, LLC (Representative)
Prospectus is here.
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