Global X bolsters gold ETF suite

Global X’s third gold-focused exchange-traded fund (ETF) in Australia has hit the ASX for advisers and investors seeking an alternative way to access the commodity.

The Global X Gold Bullion (Currency Hedged) ETF (GHLD) provides exposure to the price of physical gold by tracking the performance of the price of gold bullion currency-hedged into Australian dollars.

According to the ETF provider, GHLD marks the lowest-cost fund of its kind in Australia, with a management fee of 0.35 per cent per annum.

The announcement comes more than 20 years after the release of its flagship Global X Physical Gold (ASX: GOLD), in addition to the Global X Gold Bullion ETF (ASX: GXLD) unveiled in May 2024.

“Global X was the first issuer in the world to launch a physical gold exchange-traded product in 2003, with the now very well-known ticker code GOLD. The launch of GHLD underscores our commitment to offering best-in-class physical commodity products for Australian investors,” investment analyst Justin Lin said on Monday.

“Recent years have been marked by economic uncertainty and persistent inflation. Despite these challenges, gold has consistently proven to be a reliable asset for capital preservation and portfolio diversification. GHLD provides investors with an alternative way to gain exposure to gold, backed by Global X’s strong track record and competitive cost structure.”

The investment analyst said that, with the US Federal Reserve and the Reserve Bank likely to take diverging interest rate paths this year, currency hedging remains front of mind for investors.

“Investors want to stay exposed to gold during this time of volatility, but at the same time, they are increasingly concerned that the Australian dollar could start to rise. GHLD offers an effective solution to that problem, allowing them to stay invested and also hedge against currency risk,” Lin said.

“Gold is a cornerstone of many Australian investment portfolios, especially in times of heightened market volatility.”

Despite concerns over whether gold has further room to rise after recently surpassing US$3,000, Lin said that historical trends indicate the metal is likely poised for additional gains.

“Adjusted for inflation, gold’s all-time high actually stands at US$3,459, set in 1980 – meaning its current valuation could still be well within reason. If equity markets continue to experience turbulence, there is a possibility we could see the gold price rise to US$3,200,” Lin said.

GHLD brings Global X’s Australian product range to a total of 43 ETFs.

In February, the firm also launched the only exchange-traded fund (ETF) in Australia to track the Russell 2000 Capped Index, the Global X Russell 2000 (RSSL).

RSSL, according to the ETF manager, provides investors with exposure to US small-cap equities, a segment of the market often positioned to capitalise on emerging opportunities.

This includes the financial, healthcare, and industrial sectors, which Global X said are often under-represented in large-cap indices like the S&P 500.