 The
iShares Gold Strategy ETF (IAUF) is an exchange-traded fund that seeks
to provide exposure to the performance of gold while also using a
rules-based strategy to mitigate certain risks associated with owning
physical gold.
IAUF invests primarily in a combination of
physical gold and gold futures contracts, with a portion of the
portfolio allocated to U.S. Treasury securities as collateral for the
futures contracts. The fund uses a strategy that seeks to minimize the
negative impact of contango, which can occur when futures contracts
are priced higher than the spot price of gold. This is done by
employing a rolling strategy that seeks to take advantage of
backwardation, which can occur when futures contracts are priced lower
than the spot price of gold.
As of September 2021, the net
asset value of IAUF was approximately $500 million, with an expense
ratio of 0.25%. The fund provides investors with a way to gain
exposure to the price of gold while potentially mitigating the risks
associated with owning physical gold, such as storage and insurance
costs.
IAUF may be an attractive option for investors who are
looking for a way to gain exposure to gold and potentially reduce the
negative effects of contango, which can erode returns over time.
However, it is important for investors to understand the risks
associated with investing in gold, which include the potential for
price fluctuations, geopolitical risk, and the possibility of changes
in government policies or regulations that may affect the gold market.
Overall, IAUF may be a suitable investment for investors who are
looking for exposure to the price of gold and a potential strategy to
manage the risks associated with owning physical gold. As with any
investment, investors should conduct their own research and consider
their investment goals and risk tolerance before investing in the
fund.
|
