St Gallen-based Wegelin & Co has launched a new fund modelled on its Wegelin Realo portfolio strategy, which aims to offer a protection against inflation and currency fluctuations.

Investors are increasingly looking for protection against currency turbulence and inflation, which have greatly increased due to the unprecedented fiscal and monetary stimulus programmes following the financial downturn, the Swiss private bank said. 

The budget deficits of many countries have substantially worsened since the financial crisis, highlighted recently by the debt problems of Greece, which has been bailed out by other European Union members.

The euro yesterday fell to a four-year low of  $1.2235 against the dollar, regardless of a promise of a fresh €750 billion bail-out package.

Wegelin Realo has an even strategic asset allocation of gold, stocks and currency reserves.

Gold is often said to be inflation resistant and largely immune to political risk. The current crisis is expected to lead to a further demand for gold.

When selecting stocks, the strategy focuses on pricing power, minimal indebtedness and strong cash flows.

The portfolio also includes currency reserves of countries with excellent fundamental data or that are rich in natural resources, the private bank said.

The Wegelin Realo strategy was first launched as a portfolio in March 2009.