Reviving this topic again
for a long term hedge on the portfolio I am considering adding 5% of my monthly allocation to gold.
for a swiss investor, would it make any sense to buy this in CHF? or currency hedging in this case would simply lead to more gains erosion?
I like the physical gold backed ETFs, so what would be the go to choice here?
You can buy it chf-hedged or chf-unhedged (you avoid currency markup in that case but still follow gold performance * usdchf.).
As usual hedge is an insurance with a cost. However I use it personally here since Iâm ok betting on both gold and CHF for this purpose.
I think thatâs a misleading notion. The unhedged ETFs simply follow the gold price. Gold happens to be mainly traded in USD but that doesnât mean that the USD/CHF exchange rate is some kind of direct factor of the ETF performance.
This is exactly what I meant.
You can buy in CHF both hedged and unhedged products. Buying in CHF does not mean hedging, that was to answer @lsnguy who seems to link both.
Unhedged product in CHF (e.g swisscanto ZGLD) performance is (gold price * USDCHF), thatâs all, so thatâs the exact same internal perf of Gold (USD) measured in CHF, taking into account USD/CHF variations.
Using this product, you avoid buying USD to buy the product so you save currency change markup in comparison with USD denominated Gold ETF (e.g. ZGLDUS), which is exactly the same if not for the âunitâ.
Hedged CHF Gold is different (e.g. UBS AUCHAH), and thatâs a bet on both Gold and CHF, at a cost.
Edit: that was misleading.
Note that ZGLD has a TER of 0.4% and GLDM for example only 0.1% so probably it is still cheaper to go for a GLDM (or whatever other gold ETF in USD) and pay the FX conversion fees, especially if using IBKR as broker.
I have a CHF standing order on VIAC Invest for VIAC Gold. It says 0.28% fees. They say everything is included⊠have not calculated effective rates yet.
Sure,
I like gold with a Swiss chocolate taste better.
I was comparing the same (Swiss) product in USD and CHF for the sake of currency denomination and how it defers from hedging.
Both ZGLD and ZGLDUS are 0.4% TER
AUCHAH with its hedging sits at 0.23%.
May I then suggest some LISN with that 
thanks for this explanation
but can you also explain what would be the difference in ZGLD vs AUCHAH?
from what I know all Gold is traded in USD so the only thing would to be buy it in any currency and be impacted by its currency movements wrt USD.
How can this be hedged vs the CHF? what does someone get with a hedged product (removing the TER differences aside)
With hedging, it combines gold physical asset and, I guess, future contracts on usdchf.
ZGLD has no hedging. Say gold is 100 USD, then ZGLD is 80 CHF. If USD drops, and gold stay the same, ZGLD will drop in CHF. If USD drops and Gold rises in USD, it might drop, rise, or stay stable, depending on how much Gold rises and how much USD drops. Itâs just currency conversion, youâre not exposed to anything else but gold, just a unit conversion. You gain nothing (but avoiding using USD when trading it). If Gold drops and USD rises, same. If both drop or rise you follow the according trend of course.
With hedging itâs quite different, if Gold makes +5% in USD, expect it to follow this trend in CHF with a CHF-hedged product, so like +4% in CHF, whatever the usdchf exchange rate is.
Where you lose: you pay for hedging, it hits the absolute performance.
Itâs only a winner if USD loses continuously against CHF. -because if gold makes -10% in usd but usd gains +20% against the CHF, youâd better not be hedged.
AUCHAH will be down in CHF
ZGLDUS will be down in USD (but youâre actually winning in CHF)
ZGLD (CHF) will be up.
thanks, clear now!
I would like the CHF hedged version for sure and in that sense the VIAC product also looks attractive.
Otherwise the UBS AUCHAH seems the most logical choice?
is there any other ETF, I should look at?
VIAC gold is not CHF hedged.
Iâm curious, whatâs youâre thesis for this? (It normally doesnât make sense, you can do FX bets pretty cheaply if thatâs what you want to do).
I want this position as a protection hedge for my portfolio and for my expenditure in CHF
and to do these FX bets, it would need some effort and costs (not sure if this is more or less than the interest differential), while taking this double bet with a hedged ETF solves this. At least this is what I think with a set and forget approach with recurring order.
Again happy to learn if there is a better way to manage this.
Still, VIAC Gold is traded in CHF but without hedging. Itâs equivalent to ZGLD.
It holds UBS Gold fund CH1390275290, unhedged.
yes, so I am thinking either UBS AUCHAH or iShares CSGLDC
But leaning towards the UBS one due to their bigger AUM
The UBS ETF also has an unhedged share class (AUUSI) with the same 0.23% TER. Itâs also listed in both, USD and CHF. I.e., people who want gold that is physically in Switzerland donât need to go with the very expensive ZGLD, even if no hedging is desired.
The interest rate differential between USD and CHF is currently ~3.5%, which makes hedging extremely expensive. With normal ETFs, hedging fees are not included in the TER. How does this work with a gold ETF? In the worst case scenario, will the provider sell gold to pay for the hedging costs? Hedging with gold seems too abstract to me, I wouldnât use it.
From an economic standpoint, keeping a long-term 5% gold allocation unhedged is generally the optimal approach. While a strong Swiss Franc naturally creates a slight drag on USD-priced gold, the mathematical reality is that hedging to the CHF is expensive due to the persistent interest rate differences between the US and Switzerland. Over a decade or more, the compounding costs of maintaining that hedge typically erode returns significantly more than standard currency fluctuations do. Additionally, holding unhedged gold provides true global diversification; historical market data shows that during major global crises, the US dollar often spikes, giving unhedged gold an extra layer of safe-haven protection.
What about SGLD or IGLN?
