Schroders has launched a gold equities fund, at a time when gold prices are rising following the UK’s decision to Brexit.
The asset manager will launch the Schroder ISF Global Gold fund, to be run by commodities managers James Luke and Mark Lacey.
The fund will invest in gold and other precious metal equities, in a Ucits structure. The managers can invest in silver and platinum equities, as well as hold money in cash.
The launch comes as gold prices have soared as a result of the UK’s vote to leave the EU. The price of gold reached a two-year high on Friday, to $1,358 a troy ounce, before falling back to end the day at $1,328. Higher gold prices are expected to lead to rises in gold mining stocks.
Over the two days following the outcome of the EU referendum, the funds that saw the highest gains had exposure to gold and other perceived safe havens. The £112.7m Investec Global Gold fund gained 19.98 per cent over the two-day period, while the £1.1bn BlackRock Gold and General fund returned 18.72 per cent.
Luke and Lacey say: “Gold’s appeal as an investment asset is increasing following a period of extreme negative sentiment towards both the metal and the gold producers. We expect physical gold prices to continue recovering in the coming years, driven primarily by continued negative real interest rates and increased global macro risks.
“The recent Brexit result is a reminder of those risks. Higher gold prices will in turn boost returns from the gold mining sector. Following 15 years of underperformance relative to the gold price, the gold producers have become very cheap and are discounting gold prices significantly less than current spot prices.”
John Troiano, global head of distribution, says: “Gold companies are near 10 and even 15 year lows and while current sentiment remains negative, we are beginning to see signs that the fundamentals are turning positive for these companies. Schroder ISF Global Gold will allow investors to participate in any turnaround in gold equities.”
The fund has an 1.5 per cent annual management charge.