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3 REASONS TO CONSIDER AN ACTIVELY MANAGED ALLOCATION TO GOLD AND SILVER
Central banks are also injecting vast amounts of stimulus into the system, swelling their balance sheets to extreme levels. And unlike in 2008, this money is flowing into the real economy.
History tells us the result could be inflation – with negative real interest rates and a devaluing of fiat currencies.
If the Federal Reserve were to enact even more extreme monetary policy, such as Modern Monetary Theory or ‘helicopter money’ to support government spending plans, that would be further bullish for gold as a tool to hedge against inflation.
The gold price typically moves inversely to ‘real’ interest rates – the rate of interest excluding the effect of expected inflation. In this way, it can help to defend a portfolio against the effects of inflation.
Real interest rates in the US have turned negative, meaning that many US Treasury bondholders face losses in post-inflation terms, revealing gold and silver as the stores of true value. We see this trend continuing, and it is an ideal environment for monetary metals.
‘Shrinkflation’ where products become smaller but cost the same, is a well-known phenomenon. It is harder to track than simple price rises but is a good example of how inflation can appear from ‘out of the blue.’
- The fund manager aims to outperform gold to help allocators generate meaningful attribution
- Flexible and dynamic strategy that allocates to gold and silver bullion, and mining equities
- De-risked approach to investing in bullion and mining equities
Actively blending silver with gold
The manager aims to add value by increasing exposure to silver when prices are rising, and reducing exposure when prices are falling.
Active exposure to gold and silver mining company shares, alongside bullion
As with the blending of gold and silver, the mix of exposure to mining shares and the metals themselves is actively managed with a view to adding value as market conditions evolve.
Lower energy costs combined with rising gold and silver prices have made operating margins for gold and silver mining companies extraordinarily attractive.
WHY ALLOCATE TO SILVER ALONGSIDE PHYSICAL GOLD?
Including silver in the portfolio offers the potential for higher returns than a pure gold allocation. Silver prices tend to follow gold. Silver typically increases in value faster than gold when precious metal prices are rising. But because silver markets are smaller, silver prices also decline faster when both metals are falling.
Silver also has dual importance as an industrial component, as well being a monetary store of value.
There is growing demand for silver for use in green technologies, such as photovoltaic cells for solar panels, and it is widely used in electronics! Silver can be found in solar cells, water purifiers, touch screen & smartphones, electric vehicles and semiconductors.
Jupiter Gold & Silver Fund
Is there a piece missing from your portfolio? Learn why you might consider exposure to gold, silver and the shares of mining companies through this actively-managed fund.
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