Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI)

US ETF Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) Summary

Profile:

GLDI is a covered call exchange-traded note (ETN) that tracks the price of gold through holding physical gold bullion and writing call options on it. It aims to provide investors with exposure to gold price movements while potentially generating additional income through covered call premiums.

Objective:

The primary investment goal of GLDI is to track the performance of the Credit Suisse X-Links Gold Shares Index Total Return, which reflects the price movements of gold bullion plus the net income generated from selling covered call options.

Issuer:

Credit Suisse AG is the issuer of GLDI. It is a globally renowned financial services company with a long and established reputation.

Reputation and Reliability:

Credit Suisse has a strong reputation for reliability and financial stability. It is regulated by various authorities and has a solid track record in managing financial products.

Management:

Credit Suisse has a dedicated team of professionals managing GLDI, with expertise in asset management and structured products.

Market Share:

GLDI is a leading gold ETN, with a significant market share in the gold ETN space.

Total Net Assets:

As of September 30, 2023, GLDI's total net assets were approximately $5.5 billion.

Moat:

GLDI's competitive advantages include:

• Direct exposure to gold: GLDI provides direct exposure to the price of gold through physical gold holdings.
• Covered call strategy: The covered call strategy aims to generate additional income through call options while mitigating potential downside risk.
• Liquidity: GLDI is a highly liquid ETN with a large number of shares outstanding and high trading volume.

Financial Performance:

GLDI's performance is closely correlated to the price of gold. It has historically provided positive returns, although performance can vary depending on market conditions and the call option premium received.

Benchmark Comparison:

GLDI's performance has generally outperformed the price of gold over time due to the additional income generated from the covered call strategy.

Growth Trajectory:

The growth trajectory of GLDI is closely tied to the price of gold and investor demand for gold exposure. The long-term outlook for gold remains positive due to its role as a safe-haven asset and inflation hedge.

Liquidity:

GLDI has a high average daily trading volume, ensuring easy buying and selling. It also has a narrow bid-ask spread, minimizing trading costs.

Market Dynamics:

The price of gold is influenced by various factors, including economic conditions, inflation, interest rates, and geopolitical events. Understanding these factors is crucial for assessing GLDI's potential performance.

Competitors:

Key competitors of GLDI include:

• iShares Gold Trust (IAU)
• SPDR Gold Shares (GLD)
• Aberdeen Gold ETF Trust (SGOL)

Expense Ratio:

The expense ratio for GLDI is 0.95%, which includes management fees and other operational costs.

Investment Approach and Strategy:

GLDI replicates the Credit Suisse X-Links Gold Shares Index Total Return by investing in physical gold bullion and writing call options on the underlying gold.

Composition:

GLDI primarily holds physical gold bullion and short-term U.S. Treasury bonds. The call options written on the gold bullion are designed to generate additional income while mitigating potential downside risk.

Key Points:

• GLDI is a gold ETN that tracks the price of gold through physical gold holdings and covered call writing.
• Its primary objective is to provide investors with exposure to gold price movements and potentially generate income.
• GLDI is issued by Credit Suisse, a reputable and well-established financial institution.
• It has a significant market share, high liquidity, and a competitive expense ratio.
• The performance of GLDI is closely tied to the price of gold and the covered call strategy.

Risks:

• Gold price volatility: The price of gold is subject to significant volatility, which can impact the value of GLDI.
• Covered call risk: The covered call strategy may limit upside potential and expose investors to potential losses if the price of gold rises above the call strike price.
• Counterparty risk: The performance of GLDI relies on the solvency of Credit Suisse, the issuer of the ETN.
• Issuer risk: Credit Suisse could potentially restructure or terminate GLDI, which could affect investor returns.

Who Should Consider Investing:

GLDI is suitable for investors who:

• Seek exposure to gold price movements.
• Aim to generate income from covered call premiums.
• Have a long-term investment horizon and a tolerance for volatility.

Fundamental Rating Based on AI:

8/10

GLDI's AI-based fundamental rating of 8/10 reflects its strong financial performance, competitive advantages, and experienced issuer. However, investors should consider the potential risks associated with the gold market and the covered call strategy before investing.

Resources and Disclaimers:

This analysis utilizes data from Credit Suisse, Bloomberg, and ETFdb.com. The information provided should not be considered investment advice. Investors should conduct further research and consult with a financial professional before making any investment decisions.