The Global Asset Unit (GAU) is a unitless index designed to provide a neutral benchmark for comparing asset performance. Unlike traditional price indices that are denominated in a specific fiat currency, the GAU uses a basket of diverse global assets to create a more balanced reference point that minimizes currency bias.
The GAU is calculated as a weighted geometric mean of the prices of the assets in the basket:
GAU(t) = exp( Σ w_i * ln(P_i(t)) )
Where: - GAU(t) is the value of the GAU at time t - w_i is the weight of asset i - P_i(t) is the price of asset i at time t - Σ represents summation over all assets i in the basket
The GAU supports multiple weighting schemes:
Weights are assigned proportionally to each asset's market capitalization:
w_i = MarketCap_i / Σ MarketCap_j
This approach better represents the global allocation of wealth and provides a more realistic benchmark for comparing asset performance.
Market cap data is primarily obtained through Yahoo Finance API. If market cap data is unavailable for an asset, a fallback mechanism is used based on estimated global asset class sizes:
| Asset Class | Approximate Global Market Cap |
|---|---|
| Stocks | $116 trillion |
| Bonds | $137 trillion |
| Commodities | $20 trillion |
| Real Estate | $382 trillion |
| Gold | $13 trillion |
| Bitcoin | $1.2 trillion |
These fallback values are updated periodically to maintain accuracy.
Each asset receives the same weight:
w_i = 1/n
Where n is the number of assets in the basket.
The GAU basket includes six major asset classes to create a diversified representation of global wealth:
Includes developed and emerging markets
Global Bonds: Vanguard Total World Bond ETF (BNDW)
Includes government and corporate bonds
Commodities: Invesco DB Commodity Index Tracking Fund (DBC)
Includes energy, precious metals, industrial metals, and agricultural products
Real Estate: iShares Global REIT ETF (REET)
Provides exposure to the real estate sector
Gold: SPDR Gold Shares (GLD)
Acts as an inflation hedge and safe haven asset
Bitcoin: Bitcoin in USD (BTC-USD)
The GAU currently uses adjusted closing prices from Yahoo Finance. These are price returns rather than total returns (which will be implemented in Phase 2).
To ensure continuous GAU calculation even with occasional missing data points:
The calculator supports flexible date ranges: - Default analysis period: 5 years - User-selectable time frames: 1, 2, 3, 5, or 10 years - Custom date ranges can be specified
The GAU basket is rebalanced semi-annually: - End of June (June 30) - End of December (December 31)
Between rebalancing dates, the weights are allowed to drift naturally with market movements, subject to the following constraints: - Maximum drift: ±3 percentage points from target weight - If any asset exceeds these drift limits, an exceptional rebalancing is triggered
All changes to the GAU methodology are version-tagged and publicly announced: - Major version changes (e.g., v1.0 to v2.0) represent significant methodology updates - Minor version changes (e.g., v1.1 to v1.2) represent smaller adjustments or corrections
The following data is published daily: - GAU index level - Component weights - Price data for all assets in the basket - CSV exports for research and analysis
The historical records are maintained in a structured format that allows for easy analysis and verification.
When comparing assets against the GAU, the following normalization process is applied:
For short-term analyses (less than 60 days), a scaling factor may be applied to make small changes more visible, while preserving the direction of movement.
Daily GAU values and component weights are stored in: - Individual daily files (gau_value_YYYYMMDD.csv, gau_weights_YYYYMMDD.csv) - Consolidated historical records (gau_values_historical.csv, gau_weights_historical.csv) - Rebalancing records (rebalancing_YYYYMMDD.csv, rebalancing_history.csv)
A data cleanup mechanism prevents excessive storage usage by maintaining a reasonable number of historical files.