S&P turns to gold for hedged index

Standard & Poor’s (S&P) has launched a gold hedged index designed to offer protection against a weakening US dollar.

The index is long the total return of the S&P 500, with an overlaid long position in Comex gold futures. The aim is to protect investors from a decline in the value of the US dollar versus the price of gold, but it does not protect against equity market risk and investors will sacrifice potential currency gains against gold.

According to S&P’s back-testing, the annualised return o

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