U.S. Markets open in 2 hrs 10 mins
  • S&P Futures

    4,464.00
    -10.25 (-0.23%)
     
  • Dow Futures

    34,700.00
    -49.00 (-0.14%)
     
  • Nasdaq Futures

    15,487.50
    -30.25 (-0.19%)
     
  • Russell 2000 Futures

    2,224.00
    -9.20 (-0.41%)
     
  • Crude Oil

    72.23
    -0.38 (-0.52%)
     
  • Gold

    1,761.80
    +5.10 (+0.29%)
     
  • Silver

    22.89
    +0.14 (+0.61%)
     
  • EUR/USD

    1.1783
    +0.0011 (+0.0943%)
     
  • 10-Yr Bond

    1.3310
    0.0000 (0.00%)
     
  • Vix

    19.25
    +1.07 (+5.89%)
     
  • GBP/USD

    1.3793
    -0.0003 (-0.0221%)
     
  • USD/JPY

    109.9970
    +0.2790 (+0.2543%)
     
  • BTC-USD

    47,601.27
    -356.28 (-0.74%)
     
  • CMC Crypto 200

    1,209.38
    -23.91 (-1.94%)
     
  • FTSE 100

    7,021.35
    -6.13 (-0.09%)
     
  • Nikkei 225

    30,500.05
    +176.71 (+0.58%)
     

Gold-Indexed ETN, Hedged S&P 1500 ETF Launch

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

One of the largest banks in the world and a fund manager each launched new exchange-traded products on Wednesday, with both seeking to offset the effects of major swings in underlying indices.

Managed Exposure For Gold Bugs

Barclays Bank issued $250 million in new exchange-traded notes under the Pacer iPath Gold Trendpilot ETN (PBUG) on the NYSE Arca. The ETN’s underlying index allocates to a gold exposure in increments of 100%, 50% or 0% based on market signals.

Generally, the underlying index tracks three-month gold futures but features a trigger if the index swings more than 20% in either direction of the moving average of its last 200 days.

If the index shows a gain on the average of five straight trading days without breaching the 20% limit, the ETN aims to produce returns tied to that index. If the opposite occurs and the gold index declines for five days, the ETN shifts off its weights to avoid a bearish trend for the metal, relying instead on the three-month U.S. Treasury Bill interest rate.

If the index breaks either side of the 20% change trigger in a day, the fund cuts its weighting to the gold index in half.

PBUG is a sister ETN to Barclays’ Pacer iPath Gold ETN (GBUG), which tracks the same three-month gold index without a reweighting mechanism in the event of violent price movements. Investors will pay a fee of 0.65% annually to hold PBUG, while the GBUG has no expense ratio at all.

Hedging S&P Downturns With Options

Meanwhile, Syntax Advisors launched the Syntax Stratified U.S. Total Market Hedged ETF (SHUS), also on the NYSE Arca.

The fund tracks the S&P 1500 Index and weights its holdings to avoid overinvesting in specific industries subject to the ebb and flow of the business cycle. At the same time, it uses short-term options against the index and 12- to 24-month spread options to provide a hedge against a broader downturn.

The hedging strategy raises the fund’s expense ratio to 0.65%, or 30 basis points higher than its nonhedged sibling, the Syntax Stratified U.S. Total Market Hedged ETF (SYUS). That expense ratio is also scheduled to rise to 1.3% after a fee waiver and reimbursement strategy expires next May.

Contact Dan Mika at dmika@etf.com

Recommended Stories


Permalink | © Copyright 2021 ETF.com. All rights reserved