Schroders goes for gold

Schroders has announced the launch of a new gold equities fund, Schroder International Selection Fund Global Gold.

Schroders goes for gold

Schroders has announced the launch of Schroder ISF Global Gold. The fund will actively invest in global gold and other precious metals equities in a UCITS framework.

The fund will allow both institutional and intermediary investors exposure to gold at an interesting time for the precious metal. It will be managed by James Luke and Mark Lacey, fund managers in Schroders’ commodities team.

Schroder ISF Global Gold has 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 hold cash when the team feel it necessary.

James Luke has over 10 years of investment experience and is a precious metals specialist. Mark Lacey has over 20 years of investment experience as a fund manager specialising in bottom up stock picking within commodities.

John Troiano, global head of distribution at Schroders, said: We have a strong commodities capability at Schroders, which we are continuing to grow. 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.”

James Luke and Mark Lacey, fund managers, said: “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. The gold company management teams are focused on returns to shareholders and unlike the last decade we do not expect a return to poorly considered ‘growth at all costs’ strategy coupled with value destructive M&A.

“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.”

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