“Paper money eventually returns to its intrinsic value — zero.”
–Voltaire
We’re facing a complicated market environment, with intense geopolitical tensions and a reshaping of global supply chains that are ultimately putting pressure on the purchasing power of money. In this environment, one characterized by persistent inflation, huge government debt and political instability, investors are aggressively searching for assets that can protect against currency debasement. In fact, the new buzzword on Wall Street is “the debasement trade,” and it’s building up a lot of speed as we plunge into 2026.
So, what assets are linked to the debasement trade? Your first thought might rightly be gold, silver and other commodities, but with these prices already elevated, the real challenge is knowing when and what to own. That’s exactly where the 3EDGE Dynamic Hard Assets ETF (EDGH) comes in. This is not a simple passive fund that combines gold and oil in a single basket. Rather, EDGH applies advanced game theory and system-dynamics models to actively guide its tactical allocation decisions.
EDGH is an actively managed exchange-traded fund that invests in a diversified portfolio of hard assets. It invests in trusts backed by physical assets, as well as Treasury Inflation-Protected Securities (TIPS) and commodity-focused strategy ETFs. When inflationary expectations rise, these assets tend to outperform cash and traditional bonds, providing an important hedge for investor portfolios.
The fund has assets under management of around $140 million and an expense ratio of 1.01%. It is currently up 3.79% over the last month, and 19.40% in the last six months. This performance underscores its ability to capture value during periods of fluctuating inflationary expectations.
The top seven holdings of EDGH (accounting for approximately 82.98% of its portfolio) include: Sprott Physical Gold Trust (NYSE: PHYS), 22.48%; Harbor Commodity All-Weather Strategy ETF (NYSE: HGER), 21.73%; Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (NASDAQ: VTIP), 19.58%; iShares 0-5 Year TIPS Bond ETF (NYSE: STIP), 10.39%; PIMCO Commodity Strategy Active Exchange-Traded Fund (NYSE: CMDT), 6.99%; First American Funds, Inc. – Government Obligations Fund (NYSE: FGXXX), 1.75% and USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (NYSE: SDCI), 0.05%.
Chart courtesy of www.stockcharts.com
Many investors believe they’re well diversified simply by owning a few market sectors such as technology, health care or even consumer discretionary. However, those sectors tend to be highly correlated. The asset classes EDGH invests in, e.g., gold and energy, typically have much lower correlation with the S&P 500. When the stock market pulls back due to an economic slowdown or recession, hard assets often follow their own, independent path.
Of course, investors should not rely solely on this overview. It is important to conduct thorough due diligence before adding any stock, fund or ETF to a portfolio.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
