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 backed by physical gold held securely in vaults in London, New York and Zurich. Management costs for the unlisted managed fund at 0.14% per annum make it the lowest cost gold fund based 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$9 billion on behalf of its clients, will create the State Street Gold Fund, as part of a wider shift in its strategic asset allocation that includes a first allocation to gold.
State Street Global Advisors Asia-Pacific Gold Strategist Robin Tsui said gold can also help investors offset 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 output,” Mr Tsui said.
ANZ Private Bank Chief Investment Officer Lakshman Anantakrishnan said the decision to allocate 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 demand for safe havens is rising and some governments and central banks are trying to diversify their reserves away from the dollar. For investors, the asset class can play a similar role in times of uncertainty, helping to add diversification to portfolios given its historically low or negative correlation with most other asset classes,” said Mr. Anantakrishnan.
The State Street Gold Fund is available to both institutional and advised investors, as well as intermediary investors such as advisers and platforms.