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Schroders Launches Its First Gold Equities Fund

Amisha Mehta, Deputy Editor, London, 1 July 2016

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Schroders is offering European investors equity exposure to the “safe haven” precious metal.

The UK-listed wealth and investment manager has launched the Schroder ISF Global Gold fund to invest in global gold and other precious metal equities in a UCITS framework.

The fund, aimed at institutional and intermediary investors, will have the flexibility to invest across other precious metal stocks, such as silver and platinum when there may be opportunities based on the underlying commodity’s outlook, as well as to hold cash when the team feel it necessary. 

Fund managers James Luke and Mark Lacey, part of Schroders’ commodities team, will take an unconstrained, bottom-up investment approach. Luke is a precious metals specialist with over 10 years of investment experience, while Lacey has over 20 years of experience as a fund manager specialising in bottom-up stock picking within commodities.

“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,” said John Troiano, global head of distribution at the company.

“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,” said Luke and Lacey.

They added that the recent Brexit result is a reminder of those risks and noted that higher gold prices will boost returns from the gold mining sector.

“The renewed focus on returns discipline coupled with higher gold prices has the potential to drive significant improvements in free cash flow from the best managed companies,” they said.

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