Liontamer launches gold fund

Capital protected fund manager Liontamer is pleased to announce the launch of a new gold index fund offering investors a unique opportunity to have “pure” exposure to international price movements in gold.

GOLD Series 1 is designed for investors seeking diversification beyond the four traditional asset classes of cash, bonds, shares and property. For investors who already have an allocation to gold in their portfolio, GOLD Series 1 will utilise a capital protection feature to help them lock in recent gains and protect those gains should the price of gold fall, while at the same time still benefiting from any future growth.

Liontamer has a successful track record of investing in gold following the early maturity of a bespoke Precious Metals Fund last year, returning 48 per cent to private investors in three years.

Liontamer investment director Sean Butler says the capital protected element of the fund protects investors from any potential downside. “While we continue to see underlying support for future gains due to supply constraints and strong demand from investors and the jewellery industry, it is difficult to predict how long this will continue. Investors may want to hedge their allocation to gold and take out some capital protection in the event that the gold price starts to weaken.”

Butler says the launch of the fund is in response to strong demand for an investment class with unique risk characteristics that protects investors’ during sudden global market shocks.

“Gold is widely used as a safe haven for investors, especially during volatile economic conditions and times where there is uncertainty about major currencies like we are currently experiencing with the Euro,” Butler says. “We have seen renewed interest in gold over the past few years and, given ongoing global uncertainty, investors are once again realising that gold has a place in a well diversified portfolio.”

Recent gains in the gold price reflect the uncertainty over European sovereign debt and a potential breakup in the Euro zone. “There is no quick fix to European sovereign debt, so investors are seeking protection in their portfolios against the possible future effects of monetary destabilisation.

“Governments and Central Banks are also utilising gold as a foreign exchange reserve to back up their own currency.”

The GOLD Series 1 fund’s investment term is for six years and provides 120% exposure to the price of gold with a maximum return of 100%, meaning that any gains are boosted by 1.2 times and investors can, at most, double their money.

Unlike other gold investments, the performance of GOLD Series 1 is not affected by currency movements between the New Zealand and United States dollar and the investor’s original capital is protected at maturity from any losses.

ENDS