Schroders Investment Management launches gold shares fund
Schroders Investment Management has launched a gold equities fund.
The Schroders ISF Global Gold fund will be managed by James Luke and Mark Lacey, who are members of Schroders’ commodities team. Luke is a precious metals analyst and has over 10 years’ investment experience, while Lacey has worked for over 20 years in the industry.
As well as gold, the Ucits-compliant fund will be able to invest in other precious metal stocks, such as silver and platinum. The managers will use an unconstrained bottom-up strategy to pick stocks for the fund.
Commenting on the launch, the managers said that there are many global macro risks, including Brexit, which have driven the price of gold higher and prices are likely to continue to recover due to negative real interest rates.
‘Following 15 years of under performance 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,’ they said.
‘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.’
Schroders’ global head of distribution John Troiano added: ‘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.’
Source: City Wire
