State Street Global Advisors, the asset management business of State Street Corporation (NYSE:STT), today announced the launch of the State Street Gold Fund, a new unlisted managed fund in Australia.
The State Street Gold Fund seeks to track the performance of the spot gold price (LBMA Gold Price PM in Australian dollars) by investing in securities that are backed by physical gold bullion securely held in vaults in London, New York and Zurich. Management costs for the unlisted managed fund at 0.14% p.a. makes it the lowest-cost gold fund domiciled in Australia.
The State Street Gold Fund has been launched in response to investor demand. ANZ Private Bank, which is responsible for managing more than AU$9bn on behalf of its clients, will be seeding the State Street Gold Fund, as part of a broader change to its strategic asset allocation that includes a debut allocation to gold.
State Street Global Advisors’ Asia Pacific Gold Strategist, Robin Tsui, said gold may also help investors hedge against inflation.
“The price of gold is determined by a complex matrix of global macroeconomic and fundamental factors including central bank policies and interest rates, emerging market demand and mining production,” Mr Tsui said.
ANZ Private Bank’s Chief Investment Officer, Lakshman Anantakrishnan, said the decision to make an allocation to gold is focused on improving the risk characteristics of its multi-asset portfolios.
“Typically, rising real yields and a strong dollar spell trouble for the precious metal, but safe haven demand is rising, and some governments and central banks are looking to diversify their reserve assets away from the dollar. For investors, the asset class can play a similar role during periods of uncertainty, helping add diversification to portfolios given its historically low or negative correlation to most other asset classes,” Mr. Anantakrishnan said.
The State Street Gold Fund is available to both institutional and advised investors, as well as intermediary investors such as advisers and platforms.
