Index Description GLDW holds physical gold just like GLD; however, unlike GLD, GLDW also factors in currencies to take advantage of a stronger dollar. Here is the basic description of how the index behind GLDW works. GLDW tracks The Solactive GLD Long USD Gold Index. The Index is designed to represent the daily performance of a long position in physical gold (as represented by the Gold Price) and a short position in the basket ("FX Basket") comprised of the Euro, Japanese Yen, British Pound Sterling, Canadian Dollar, Swedish Krona and Swiss Franc ("Reference Currencies") (i.e., a long USD exposure versus the FX Basket). In simple terms, the Index reflects the price of Gold in U.S. dollars adjusted by the price of each Reference Currency comprising the FX Basket against the U.S. dollar."[ GLDW Fund Page ] Digging deeper into the prospectus, I found that GLDW has a unique mechanism, by which it accomplishes the goal of accounting for a stronger dollar. It either receives gold from the gold delivery provider if the dollar strengthens and it delivers gold to the gold delivery provider if the dollar weakens. The Gold delivery provider as referenced below is Merrill Lynch International. The Fund will enter into a transaction to deliver Gold Bullion to, or receive Gold Bullion from, the Gold Delivery Provider each Business Day. [ GLDW Prospectus ] "In general, if there is a currency gain (i.e., the value of the USD against the Reference Currencies comprising the FX Basket increases), the Fund will receive Gold Bullion.
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