By Dai Qi
The Managing Director USA and ETFs of the World Gold Council (WGC) Joseph Cavatoni said in a recent interview that when facing risks, whether it is geopolitical ones or market changes, investors would look for a more stable asset class, but with higher liquidity, and that is gold's best feature.
Cavatoni joined the World Gold Council from BlackRock in 2016.
Joseph Cavatoni in an interview with China Fortune Media on Junly 25 during the China Gold Congress. (Photo by Li Lin/China Fortune Media)
Commenting on Cavatoni's appointment, the then Chief Executive Officer of the WGC, Aram Shishmanian said, "In an environment where gold is increasingly relevant in protecting investors against unprecedented market uncertainties and negative interest rate policies, Joe's deep knowledge of exchange-traded funds (ETFs) and asset management will enable us to develop a new generation of investment solutions."
Nearly two years have passed, what has Cavatoni brought to investors and the gold investment industry? What is the new trend from his point of view in the global gold market?
"Our mission is to make gold a mainstream investment. We are on the path of continuing to educate, demonstrate to investors the role gold plays in a portfolio and bringing about products to enable them to get that done," said Cavatoni.
From his perspective, education is the most crucial element to achieve that goal.
"The mastery we need to achieve is to create a simpler and better message about how gold works as a portfolio. With a simplified method around a gold portfolio, which contains returns, correlation and liquidity, investors can better understand the gold market and properly use it," said Cavatoni.
Another way to make gold a mainstream investment is to create better products.
"We are talking with our clients about what they need, and we are trying to find what the market is short of. Recently, we have brought out a new fund product called SPDR? Gold MiniShares (GLDM) as a complement to our famous product SPDR? Gold Shares (GLD). That is because we found that a sector of the market wasn't being served," said Cavatoni.
By targeting different groups of investors, a global advisory, retail platforms, online trading, the by-hold personality of consumers, Cavatoni and his team are attempting to sense their needs and satisfy them with appropriate products.
"GLD is a very efficient, highly liquid capital market instrument. We also invented the SPDR? Long Dollar Gold Trust (GLDW), which is a dollar-hedged product suitable for a strong dollar environment, and the GLDM product that may be beneficial to investors who desire longer-term exposure to gold," added Cavatoni.
A report released by the GWC during the 2018 China Gold Congress states that in the next 30 years, gold supply might reduce a little bit, but in a more affluent world where there are larger middle-class populations and a higher level of connectivity, gold ornaments and technologies could see better market demand.
Moreover, gold will continue to attract investors due to potential economic risks in the global market, and the whole industry will be vigorous in 30 years time, according to the report.
"Investors are open-minded around the fundamentals they are given because it is increasingly difficult to find certain longer-term profiles among the asset classes. They are looking for something that is stable and appropriate to correlate their portfolios, and they are looking for asset classes that they can soon comprehend. That is what gold can provide. With gold, you can achieve your liquidity, and you can achieve your return of profile," said Cavatoni.
