View the article online at http://citywire.co.uk/money/article/a386440
Buy gold now to hedge out inflation and currency risk
Jupiter Merlin’s fund of funds head does not see a gold bubble forming over the mid term and believes the asset class offers great insurance against inflation and currency risks
Jupiter Merlin’s fund of funds head John Chatfeild Roberts has been continuing to build his exposure to gold across his fund of funds range on a view that price rises in the sector over the past two years have not yet peaked.
Chatfeild Roberts (pictured) told Citywire that exposure to the asset class now comprised between 5% and 7% across the Jupiter Merlin fund of funds portfolios he manages with Peter Lawery and Algy Smith-Maxwell, with the team recently increasing exposure to BlackRock Gold & General, as well as buying into a gold ETF (exchange traded fund) tracker.
He said: ‘The gold price has stayed at a similar level but gold shares have come back up a little.
‘The advent of ETFs has made owning gold a lot easier. You used to have to buy the shares but now a lot of demand is being directed to the metal itself.’
Despite believing that there has been a huge surge in demand over the past two years, Chatfeild Roberts said he did not believe an asset bubble was developing in gold, at least over the next two years.
‘It does not seem like a bubble. Gold has not peaked out and is insurance partly on the currency. In an uncertain world, a bit of insurance is no bad thing,’ he said.
Chatfeild Roberts has also been building his cash positions over the past few months, on a view that wealth preservation has become all-important as his concerns over the continuing onerous levels of debt in the global economy remain.
‘This is not a market to get excited about. It is a difficult time to invest and you have to make sure you preserve people’s wealth. The central banks are forcing people to take on risk and you have to worry about returns on assets,’ he said.
‘People should remain very concerned about returns on their assets; if you have £10,000 in an account you have to keep a very careful eye on inflation and currency. This is an environment where a huge amount of wealth has been destroyed.’
He admitted that having relatively low exposure to sterling last year had hurt performance but had had a beneficial effect so far this year. ‘Global bond funds have to have very good currency managers because they have to get the duration right and predict when currencies will widen.
‘This pair is very experienced and the majority of bond returns come from getting the currency calls right.’
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the funds
- Jupiter Merlin Balanced Portfolio Acc
- Jupiter Merlin Growth Portfolio Acc
- Jupiter Merlin Income Portfolio Acc
- Jupiter Merlin Worldwide Portfolio Inc
- Thames River Global Bond GBP Dist
Look up the fund managers
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.