I can see why income-hungry investors would want to cut their gold exposure in the current climate, but with more uncertainty and possible recession in our midst – the long-term argument for gold remains as strong as it has ever been.
Investments to consider
Jupiter Gold & Silver invests in both physical gold and silver bullion, as well as gold and silver mining companies. The fund’s neutral position is 50:50 gold/silver. The portfolio is very sensitive to geopolitical risk and typically avoids mining companies that invest in dangerous parts of the world.
Ninety One Global Gold is a concentrated fund investing in gold mining companies. The manager says that gold equities offer leverage to the gold price, so if you believe in gold you are better off owning gold equities. In addition, unlike physical gold, many gold miners pay a dividend and these payouts have been rising in recent years.
BlackRock World Mining trust has significant flexibility to invest across various metals and mining companies, including unquoted companies. It has a conviction-led approach to investing in the mining sector, as opposed to focusing on the short-term direction of commodity prices. The trust currently has a 12.4 per cent allocation to gold.
Darius McDermott is managing director of Chelsea Financial Services & FundCalibre
