Mike Venuto comments on new Gold Hedged ETFs

By Cinthia Murphy
Toroso Investments
Published in ETF.com

The Rex Shares gold-hedged ETFs—new to market this month—attempt to solve a common asset allocation problem many advisors face: What to do about gold?

Most advisors today feel like they must own gold. Most do so because gold offers diversification and portfolio hedging benefits. It can even prove useful for short-term tactical purposes, such as when the need arises for a safe haven in times of turbulent market action.

But as an asset, gold doesn’t generate any type of earnings yield that compounds, or any type of income. For that reason, many advisors struggle with tying up capital in gold at the expense of other assets. An allocation to gold means a smaller allocation to something else.

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