Carmignac’s David Field has increased the exposure to gold in the £832m Carmignac Commodities fund.
Speaking at the Carmignac Gestion quarterly meeting on behalf of Field, Simon Lovat – an analyst in the commodity equities team – said their “preferred short-term weighting is for gold”.
Lovat says the team raised the fund’s gold exposure from 21 per cent to 25 per cent to benefit from the increase in global liquidity pushing up gold prices.
The commodities team favours gold miners to physical gold, on the view gold miners will outperform the price of gold over the next three months.
“Gold companies prefer profits to growth and production. That’s why we believe they will continue to outperform,” explains Lovat.
“They are on historically low valuations. They are cheap as they are not investing their cashflow.”
He adds: “We have cut our exposure to gold royalty companies – although we still like them – and invested in mid-cap production companies such as Randgold Resources and Eldorado Gold.”