The WAY Group Newsletter for Financial Advisers | July 2010
Go for gold!
Did you know that the WAY Charteris Gold Portfolio is the Number 1 fund out of 2,500+ funds across all IMA sectors over three months?
Launched only four months ago, we are keen that your radar is alerted as soon as prudent to a most competitive performing fund in an asset class that is currently vibrant and where there are relatively few players.
Of course, there is no guarantee that the WAY Charteris Gold Portfolio will continue to outperform all others in its peer group but it is clearly in the right stocks at a time when equities generally look volatile in both the short and medium term and the traditional cash and gilt options remain unattractive for their own reasons.
A 5%-10% holding in gold right now may be scoffed at for its temerity by the 'gold bugs' who are advocating a long term prime weighting (forecast prices for gold over the next 2-3 years range from $1300 to $5000 an ounce) but as a diversifier in an overall portfolio it represents a considered and attractive alternative to the traditional mix.
Base detail
- The Fund gives investors exposure to Gold via a regulated OEIC
- The Fund invests in 'blue chip' Gold mining companies as its core supplemented with smaller stocks where opportunity to enhance growth is seen
- The Fund can hold up to 10% in Gold ETF's (Exchange Traded Funds)
- Whilst the fund will primarily invest in Gold mining shares, in times where bullion might be expected to outperform the fund can also invest in Gold ETC's (Exchange Traded Certificates) as a proxy
- It is a long-only non-leveraged fund with no intention to short or hedge
- The Fund has both an Accumulation share class and an Income share class available to both retail and institutional investors
- Since launch in February 2010 the fund has risen by 15.06%.
Fund manager
Ian Williams
- Ian has spent the last 35 years trading in Equities, Commodities and G7 Government Bonds, covering sales, research, market making and proprietary trading. He was a member of the London Stock Exchange for many years before joining Chase Manhattan Bank (now JP Morgan). He subsequently worked for Dresdner Kleinwort Benson and Guinness Mahon (now Investec) before becoming Chairman & Chief Executive of Charteris Treasury Portfolio Managers. Ian runs the 5* rated "City Financial Strategic Gilt Fund" which is the top performing Gilt Fund in the UK since its launch in December 2006 (Source: Lipper) as well as The 4* rated "Elite Charteris Premium Income Fund". He has managed private and offshore gold portfolios and is now bringing his expertise to the retail market. Ian is a Fellow of the Chartered Securities Institute.
Gold outlook
(i) General
- With low interest rates and global currencies under pressure Gold is re-asserting itself as an alternative reserve 'currency.
- Increasing demand from emerging markets - China and India in particular - will continue to support the bullion price
- In contrast, the supply side is falling with South African production decreasing and Western governments and banks no longer disposing of their reserves
- Whilst Gold may have reached an all time high in nominal terms, its inflation adjusted price remains inexpensive.
(ii) Fund specific
- With the positive in-flow of new monies associated with a competitive new fund in a rising market, the manager has the collateral to remain nimble and take swift advantage of opportunities arising
- There is no hangover from BP holdings like some competitor funds
- South African holdings are eschewed as exploration becomes more difficult, electricity supply more erratic and the fear of further taxation to fund the poverty fight rises
- Gold shares historically outperform Gold bullion in a rising market due to the operational gearing (i.e. fixed or semi-fixed costs vs. rising revenue stream)
- Additionally, Gold share prices can forge ahead on merger and acquisition activity (already experienced in the fund) and also benefit from fresh discoveries through exploration and dividend payments arising from profits.
How to deal
- By Application Form - Download at http://www.waygroup.co.uk/downloads/plan-documents.aspx.
- By Telephone - ring dealing line 01202 855856
- By Platform - currently available on Transact, Ascentric, Nucleus, Novia (ring Tony Lyons on: 01202 890895 for any updates).
ISIN & SEDOL numbers
WAY CHARTERIS GOLD PORTFOLIO FUND WAY Retail INC
ISIN: GB00B3PRHD86 Sedol: B3PRHD8
WAY CHARTERIS GOLD PORTFOLIO FUND WAY Retail ACC
ISIN: GB00B3LP0714 Sedol: B3LP071
WAY CHARTERIS GOLD PORTFOLIO FUND WAY Institutional INC
ISIN: GB00B3MKC577 Sedol: B3MKC57
WAY CHARTERIS GOLD PORTFOLIO FUND WAY Institutional ACC
GB00B3P4PJ11 B3P4PJ1
Summary
- There is no guarantee that the WAY Charteris Gold Portfolio will continue to outperform all others in its peer group but it is clearly in the right stocks at a time when equities generally look volatile in both the short and medium term and the traditional cash and gilt options remain unattractive for their own reasons
- A 5%-10% holding in gold right now may be scoffed at for its temerity by the 'gold bugs' who are advocating a long term prime weighting (forecast prices for gold over the next 2-3 years range from $1300 to $5000 an ounce) but as a diversifier in an overall portfolio it represents a considered and attractive alternative to the traditional mix.
Yours sincerely,
Eddie O'Gorman
UK Head of Sales & Marketing
2nd July 2010.
References:
1. Data & Statistics - Financial Express
2. Others: Lipper; Charteris Treasury Portfolio Managers Limited
– Ends –
Associated Links:
Read the independent commentary for IFAs: "Heavy metal"
Watch the WAY Charteris Gold Portfolio Fund: Introductory Video
View the latest WAY Charteris Gold Portfolio Fund: Factsheet
View the WAY Charteris Gold Portfolio Fund: Plan Documents
Learn more about WAY's: Specialist Funds
How to contact us
We hope you found this article informative and that some of the issues raised will prove useful for developing business with your clients? If you wish to discuss any matters arising from this article or, indeed, want to talk to us about any of WAY's products, then you are most welcome to call either Tony Lyons, IFA Support Manager, or Mark Benson TEP, Technical Manager , on head office telephone number: 01202 890895. Or, if you prefer, you can use the website: Contact Form to get in touch. We look forward to hearing from you.
The WAY Group Newsletter for Financial Advisers | July 2010
Please Note:
This document has been prepared for Financial Intermediary Clients and Professional Associates of WAY Investment Services Ltd and is not intended for and must not be distributed to Private Investors. This document does not constitute investment advice or a recommendation to purchase or sell any security. The investments and services referred to in this document may not be suitable for every investor and if in doubt independent financial advice should be sought. No representation or warranty is given (express or implied) as to the accuracy, completeness or correctness of the information nor the opinions, interpretations and conclusions contained in this document. No liability is accepted whatsoever for any loss howsoever arising from any information in this document subject to the rules of the Financial Services Authority or the Financial Services and Markets Act 2000. Past performance is not necessarily a guide to future returns and changes in rates of exchange between currencies may cause the value of investments to rise or fall. Share prices, values and income can go down as well as up and investors may get back less than their initial investment. WAY Investment Services Ltd is an Appointed Representative of WAY Fund Managers Ltd which is authorised and regulated by the Financial Services Authority.