Challenge
Seeking to manage potential geopolitical, macroeconomic and central bank policy risks.
Solution
The Jupiter Gold & Silver strategy invests in gold and silver bullion funds and gold and silver mining equities. Gold is considered to be a safe-haven asset and apolitical money – unlike currencies that are printed and issued by governments. Gold is held as an important component of the reserves of central banks across the world; central banks hold gold for its safety, liquidity and return characteristics, and central bank buying of gold has increased in recent years.1
Silver, like gold, has monetary characteristics as well as industrial uses. In fact, it is in short supply as industrial demand for the white metal is growing in areas such as battery production and green technology.
The Jupiter Gold & Silver strategy uses a flexible and dynamic blend of gold & silver bullion funds and mining equities, and seeks to offer additional benefits including higher beta versus a holding of physical gold.
Primary central bank reserves
Benefits
- Potential to mitigate market, geopolitical risks
- Gold considered to be a safe haven asset
- Strategy offers mining, silver exposure in addition to gold
- Central banks own gold for safety, liquidity and return characteristics
Strategy specific risks
- Investment risk - there is no guarantee that the strategy will achieve its objective. A capital loss of some or all of the amount invested may occur.
- Sector concentration risk - the strategy’s investments are concentrated in natural resource companies, and may be subject to a greater degree of risk and volatility than a fund following a more diversified strategy. Silver tends to outperform gold in a rising gold price environment and it tends to underperform gold when sentiment moves against the sector.
- Strategy risk - as the strategy invests in other collective investment schemes, which themselves invest in assets such as bonds, company shares, cash and currencies, it will be subject to the collective risks of these other funds. This may include emerging markets risk and smaller companies risk.
- Company shares (i.e. equities) risk - the value of Company shares and similar investments may go down as well as up in response to the performance of individual companies and can be affected by daily stock market movements and general market conditions.
- Concentration risk (number of investments) - the strategy may at times hold a smaller number of investments, and therefore a fall in the value of a single investment may have a greater impact on the strategy’s value than if it held a larger number of investments.
- Currency risk - the strategy is denominated in USD but may hold assets denominatedin, or with exposure to, other currencies. This share class is denominated in GBP. The value of your shares may rise and fall as a result of exchange rate movements.
- Smaller companies risk - smaller companies are subject to greater risk and reward potential. Investments may be volatile or difficult to buy or sell.
- Liquidity risk - some investments may become hard to value or sell at a desired time and price. In extreme circumstances this may affect the strategy's ability to meet redemption requests upon demand.
- Derivative risk - the strategy may use derivatives to generate returns as well as to reduce costs and/or the overall risk of the strategy. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations.
Sources
1World Gold Council, https://www.gold.org/goldhub/research/gold-market-commentary-december-2023
Important Information
This is a marketing communication. This document is intended for investment professionals and is not for the use or benefit of other persons. This document is for informational purposes only and is not investment advice. Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the individuals mentioned at the time of writing, are not necessarily those of Jupiter as a whole, and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Issued in the UK by Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. Issued in the EU by Jupiter Asset Management International S.A. (JAMI), registered address: 5, Rue Heienhaff, Senningerberg L-1736, Luxembourg which is authorised and regulated by the Commission de Surveillance du Secteur Financier. No part of this document may be reproduced in any manner without the prior permission of JAM/JAMI.